GBP/USD supported at 1.5850

FXStreet (Mumbai) - GBP/USD trimmed losses and recovered from session lows in the European morning, having faced rejection at 1.59 handle after the US dollar regained lost footing and climbed higher versus its major competitors amid a data-light EUR calendar.

GBP/USD moves away from 7-month highs

The GBP/USD pair trades slightly lower by -0.09% at 1.5865, bouncing-off session lows at 1.5851. The cable fell this session largely on a profit-taking slide after the pair reached fresh seven month highs at 1.5930 on Thursday.

Moreover, broad based rebound in the US dollar also added to the losses in the GBP/USD pair. The US dollar index, the virtual gauge of the greenback’s relative strength trades -0.28% higher at 94.47levels, having previously posted session highs at 94.58.

On Thursday, the unexpected increase in retail sales in May pushed the cable more than 200 pips higher, while the US headline CPI data that missed the forecast added to GBP/USD strength.

Later in the day, markets now await UK’s public sector borrowings data for any impact on cable amid lack of fresh triggers.

GBP/USD Levels to consider

The pair has an immediate resistance at 1.5897 (Today’s High) above which gains could be extended to 1.5930 (June 18 High)levels. On the flip side, support is seen at 1.5851 (Today’s Low) below which it could extend losses to 1.5803 (June 18 Low) levels.

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The KBC Bank Research Team notes that GBP remains in excellent shape and although EUR/GBP is expected to range-trade, the negative bias for the pair remains intact.
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