GBP/USD reverses and drops to test 1.2600

• Cable reverses as the US Dollar rebounds from weekly lows.
• Wall Street drops sharply, volatility soars, and gold declines to $1800/oz.

The GBP/USD pair is still positive for the day, on its way to the fifth consecutive daily gains but it moved off highs. Earlier on Thursday, it climbed to 1.2669, the highest level in three weeks but then turned to the downside, falling to 1.2599, matching the Asian session low.

As of writing, GBP/USD trades at 1.2625/30, modestly higher for the day. Cable pulled back amid a stronger US dollar. The greenback rose across the board as equity price sin Wall Street turned sharply to the downside after the US Supreme Court ruled that President Trump cannot block the release of his financial records to prosecutors.

US stocks turned to the downside and US yields move lower. The greenback rose particularly gains commodity currencies. The DXY bounced from four-week lows to 96.70. US data released showed initial jobless claims came in better-than-expected at 1.31 million. The numbers have no impact on the US dollar.

Levels to watch

The GBP/USD holds a constructive set up but the bullish momentum eased after the recent correction. The immediate support is seen at 1.2595, followed by 1.2560. A break under 1.2530 could negate the bullish bias. On the upside, resistance is seen at 1.2630 (horizontal level and 20-hour moving average) and 1.2665.