- GBP/USD extends rebound into the second straight day.
- The US dollar corrects further, undermined by the upbeat mood.
- GBP bulls jump back above 50-DMA, as the focus shifts to the BOE decision.
GBP/USD is looking to build onto Friday’s rebound from five-week lows of 1.3357 reached last Thursday, as the overall upbeat market mood favors the high-beta currency in the pound.
Collaborating with the upswing in the cable, the US dollar eases from one-and-a-half-year highs against its main peers, as investors take profits off the table ahead of the BOE interest rate decision and US payrolls.
The BOE is likely to deliver a second 25-bps post-pandemic rate hike on Thursday, slightly ahead of the Fed in the tightening cycle.
Apart from the BOE outcome this week, markets also remain focussed on the Brexit Freedoms Bill passage and the UK’s political scenario for fresh trading opportunities in GBP/USD.
Looking at GBP/USD’s daily chart, the pair is recovering ground above the horizontal 50-Daily Moving Average (DMA) at 1.3419.
The 14-day Relative Strength Index (RSI) is recovering from lower levels while below the midline, aiding the upturn in the spot.
However, for the rebound to gather steam, the major needs to find acceptance above the January 27 highs of 1.3468.
The next upside target is aligned at the 1.3500 round level.
GBP/USD: Daily chart
Alternatively, if the bulls fail to yield a daily closing above the 50-DMA hurdle, then the downside momentum could resume towards the intraday lows of 1.3387.
Further south, GBP bears will challenge the bullish commitments at the five-week lows.
GBP/USD: Additional technical levels
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