GBP/USD consolidates gains, after finding resistance at 1.2500

GBP/USD failed to hold above 1.2500 and pulled back. During the last hours, it has been hovering around 1.2470, consolidating daily gains. 

The pound is among the top performers of the day. It gained momentum after UK Prime Minister Theresa May, hinted that the UK government will seek for a transitional Brexit deal, to avoid a feared economic collapse.

The current consolidation goes on despite the recovery of the US dollar in the market. The decline in the EUR/GBP helped the GBP/USD to remain near daily highs. 

Price is moving between 1.2450 and 1.2500, posting the biggest daily gain in a week so far. The area around 1.2500 continues to be a strong barrier that also capped the upside last week. 

Data ahead 

Incoming data from the US includes existing home sales (Tuesday), durables goods orders, Manufacturing PMI, new home sales and FOMC (Wednesday). 

“We expect the manufacturing sector to have continued improving in November, while a constant service index should still point to solid growth in the US service sector. In the Fed minutes, we will look for clues to the Fed’s 2017 outlook, now that a hike in December is almost priced in,” said analysts from Danske Bank. 

In the UK, the most important release will the second estimate of GDP growth during the third quarter (Friday). Another event to look for is Philip Hammond, Chancellor of the Exchequer delivering its first Autumn Statement to Parliament on Wednesday.

To learn more about this topic, check our video analysis

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