GBP/USD approaches 1.3050 on USD selling

GBP/USD has managed to rebound from multi-week lows around the 1.30 neighbourhood and is now looking to re-visit the 1.3050 area.

GBP/USD supported near 1.3000

After briefly sinking below the 1.3000 handle on Friday, spot has started the week on a positive note following the current profit taking sentiment around the greenback.

Absent releases in the UK docket today, USD dynamics will remain the exclusive driver for the price action ahead of the critical FOMC meeting on Wednesday. The probability of a Fed’s rate hike this week remains at 12%, while it has climbed above 45% for the month of December.

In the meantime, GBP remains under pressure via extreme positioning from speculators, with net shorts still in record levels albeit retreating to 3-week lows along with declining open interest during the week ended on September 13, according to the latest CFTC report.

GBP/USD levels to consider

As of writing the pair is advancing 0.34% at 1.3045 facing the next resistance at 1.3149 (55-day sma) followed by 1.3208 (20-day sma) and finally 1.3447 (high Sep.6). On the other hand, a breach of 1.2992 (low Sep.16) would expose 1.2863 (low Aug.15) and then 1.2796 (2016 low Jul.6).