- DXY, USTs on the back foot on US tax re-vote.
- Brexit optimism support on May & Trump agreement.
- The UK CBI realized sales and BOE Carney’s speech in focus.
After a brief stint of consolidation in early trades, the GBP/USD pair resumed its recent upmove and regained the 1.34 handle on Brexit optimism, but the buyers failed to retain control above the last, as sentiment sours on the back of the latest North Korea headlines.
GBP/USD hits fresh 2-day tops, then retreats.
The Cable remains better bid amid a phase of downside consolidation seen in the US dollar against its major peers, as the USD bulls remain on the back foot amid the renewed selling seen around the Treasury yields ahead of the US tax reform re-vote.
Brexit: BOE to soften impact on European banks - BBC
The upbeat tone seen around the pound is also driven by the reports citing that the UK PM Theresa May and the US President Trump agreed on the importance of a swift post-Brexit bilateral trade deal over a telephonic conversation late-Tuesday.
However, it remains to be seen if the major can sustain another break above 1.34 handle, as the Brexit jitters persist, with the EU making the Brexit transition a difficult task for the UK while the latest North Korea news dent the sentiment around the higher-yielding GBP.
In the meantime, the focus remains on the UK CBI realized sales data and BOE Governor Carney’s testimony on the November Financial Stability Report before the Treasury Select Committee, which will offer fresh impetus to the GBP.
Also, of note remains the US existing home sales data and tax vote which is scheduled later in the NA session today.
GBP/USD Technical Levels
According to FXStreet’s Chief Analyst, Valeria Bednarik, “technical indicators in the mentioned (4-hours) chart fail to support a downward extension, as the Momentum maintains a positive stance while the RSI turned higher, currently at 50, rather supporting additional gains for the upcoming sessions. The pair keeps trading inside a descendant channel, with a critical support around 1.3300, where buying interest has been surging this month. Support levels: 1.3335 1.3300 1.2960. Resistance levels: 1.3400 1.3440 1.3485.”
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