GBP/USD off 10-week lows, but stays below 1.2200

The bears loosened their grip on the pound in the European session, allowing a tepid recovery in GBP/USD back towards 1.22 handle following the release of upbeat UK HPI data.

GBP/USD trades all major DMAs

The cable makes minor-recovery attempts from ten–week lows struck at 1.2165 levels, although lacks momentum amid negative equities and oil prices, which weigh on the investors’ appetite towards risk assets.

Although the bulls were offered some respite from better-than expected UK Halifax House Price Index (HPI), which arrived at 1.70% m/m in Dec vs 0.30% expected and 0.20% last.

However, any recovery in the GBP/USD pair is expected to remain fragile as a Hard-Brexit-driven concerns return to markets, after UK PM Theresa May noted over the weekend that Britain will end up withdrawing from the single market and then trying to quickly negotiate a free trade deal with the European Union.

Attention now turns towards the US LMCI data and Fed’s Rosengren and Lockhart’s speech scheduled later on Monday, which will provide fresh insights on the US interest rates outlook moves going forward.

GBP/USD Levels to consider            

In terms of technical levels, upside barriers are lined up at 1.2200 (round figure), 1.2260 (daily pivot) and 1.2294 (5-DMA). While supports are seen at 1.2165 (10-week low) and 1.2141 (Oct-end lows) and below that at 1.2100 (key support).