GBP/USD manages to regain 1.2600 ahead of Queen’s Mansion speech

The bears loosened their grip on the GBP, allowing GBP/USD to bounce back above 1.2600 levels, as attention turns towards the Queen’s Mansion House speech due at 10.30GMT.

Queen's Speech to be focused on Brexit

The GBP traders remain on the edge, as the Queen is set to pave the way for the new parliament, despite the UK PM May’s Conservatives Party having not yet reached a deal with Northern Ireland’s Democratic Unionist Party (DUP). The Brexit talks will take center-stage in the Queen’s speech, as markets await fresh updates on the Great Repeal Bill for Brexit, as well as on the government plans for the next two years.

The recovery seen in GBP/USD over the last hour, is mainly driven by fresh US dollar selling across the board. However, it remains to be seen if the spot manages to sustain the recovery, as the pound remains under pressure amid dovish BOE Governor Carney’s remarks and lingering UK political concerns. BOE’s Carney: Now is not yet the time for rate adjustment

Meanwhile, GBP/USD also found some support from UK public sector net borrowings data and BOE’s Agents Summary of Business Conditions. Focus now remains on the Queen’s speech and BOE MPC member Haldane’s speech due to be reported shortly.

GBP/USD levels to consider             

Karen Jones, Analyst at FXStreet explained, “GBP/USD is negative very near term. Has sold off and is approaching its 200 day ma at 1.2555. We note the 13 count on the 60 minute chart and would allow for this to hold the initial test. The market stays directly offered below its 55 day ma at 1.2811 and 20 day ma at 1.2814.”

“The previous range 1.2775-1.3060 should now act as formidable nearby resistance. Below the 200 day ma we look for losses to extend to the 1.2500 9 month support line and 1.2468/61.8% retracement. There is potential for the 1.2366 the 10th April low,” Karen concluded.