GBP/USD rebounds sharply to test 1.3550 as USD sell-off extends
- Bounces-off weekly lows sub-1.3500
- USD sell-off intensifies
- Mixed UK data ignored?
The GBP/USD pair staged a solid reversal from eight-days lows of 1.3482 and swung back above the 1.35 handle to now revisit daily highs reached at 1.3542 in early Asia.
GBP/USD: Volatile, but within range
The spot erased entire losses and trades neutral, as the bulls fight back control amid an extension of the sell-off in the US dollar against its main competitors, as investors sold-off the buck in reaction to the latest comments by the Chinese officials. The Chinese officials are reportedly considering to slow or halt the purchases of the US Treasuries, viewing them as less attractive to other assets.
The USD index accelerated declines, now flirting with two-day lows of 91.75, down -0.50% on the day while Treasury yields jump +0.90% to +1.65%, with 10-year yields spiked to fresh ten-month tops of 2.588%.
Meanwhile, the GBP bulls appear to have shrugged-off mixed UK macro news, with the industrial figures coming in stronger while the trade deficit unexpectedly widened in the reported month.
Looking ahead, the pair will closely track the USD price-action and broader market sentiment for fresh moves amid a lack of relevant economic releases from the US docket.
GBP/USD Technical Levels
FXStreet’s Analyst, Haresh Menghani, writes: “A decisive break through the 1.3500-1.3490 region, representing 23.6% Fibonacci retracement level of the pair's up-move from Nov. lows and also coinciding with a short-term ascending trend-line resistance break-point now turned support, could accelerate the fall back towards the 1.3400 handle with some intermediate support near the 1.3435-30 area.”
“On the upside, any attempted move back above 1.3565 horizontal resistance might continue to confront strong resistance near the 1.3600-1.3610 region, above which a bout of short-covering has the potential to lift the pair back towards 2017 yearly highs resistance near the 1.3655-60 region, touched in September,” Haresh adds.