GBP/USD on a steady recovery path, 1.3250 tested

Fresh bids emerged near the key support at 1.3230 levels, allowing a tepid bounce in GBP/USD pair over the last hours, in a bid to regain 1.3250 barrier.

GBP/USD: 1.3300 still on sight?

The recovery in GBP/USD is seen faltering, as we head into early European trading, as markets await the sentiment on the European markets for the next push higher.

Moreover, the bulls find it hard to take-out the key resistance of 1.3250, as traders refrain from creating fresh positions on the higher-yielding GBP ahead of the main risk event of this week, the US non-farm payrolls data.

However, looming concerns over the UK’s political climate amidst the Brexit deal continues to undermine the sentiment around the pound, while the yield differential amid diverging monetary policy outlooks between the Fed and BOE remains USD supportive.

Meanwhile, markets look to have moved past upbeat UK’s services sector data release, as focus now shifts towards the US macro news and speeches from BOE and Fed officials for near-term trading opportunities.

GBP/USD Preferred Strategy

According to Jim Langlands at FX Charts: “Cable remains heavy despite Wednesday’s data, which showed that the UK PMI Services rose to 53.6 in September, up from 53.2 and above expectation of 53.2.Further medium term downside momentum seems likely although the short term momentum indicators are becoming a little oversold so for the time being it is best to stay square, and looking to sell rallies would seem to be the plan.”