The GBP/USD pair paused its BOE-inspired rally just ahead of 1.34 handle and consolidated almost throughout the Asian trades below the last, as markets digest the overnight North Korea news heading into the key US retail sales and industrial production data due later on Friday.
GBP/USD: Will it extend the recent bullish move?
The spot is seen extending its overnight struggle to take on the upmove beyond 1.34 handle, as the bulls turn on the back foot amid the latest round of North Korea missile launch, which spooked markets and weighed down on the risk currency GBP.
Moreover, upbeat US CPI report and rising Dec rate hike expectations offer the much-needed impetus to the US dollar against its major peers, further collaborating to the stalled upside in GBP/USD. The USD index bounced-off a brief dip below 92 handle to now trade positive near 92.10 levels.
Cable rallied hard to hit the highest levels in a year at 1.3406 on Thursday, after the BOE signaled that a rate hike is expected to be the central bank’s next policy move, with the BOE Governor Carney noting that the possibility of a rate hike had definitely increased.
Focus now shifts towards a fresh batch of macro news due out from the US later today, including the retail sales and industrial production, in the wake of a data-light EUR calendar today. Meanwhile, the BOE’s quarterly bulletin may virtually no impact on the spot.
GBP/USD levels to consider
Valeria Bednarik, Chief Analyst at FXStreet, explained: “In the 4 hours chart, indicators are losing strength and turning lower, but the price accelerated through the 20 SMA, now gaining bullish strength, well below the current level, supporting further gains ahead, with the market now eyeing 1.3445, September 2016 monthly high. Support levels: 1.3355 1.3320 1.3275 Resistance levels: 1.3410 1.3445 1.3480.”
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