GBP/USD retreats from highs, approaching 1.3120

The recent upside momentum around the Sterling is losing some impetus on Monday, with GBP/USD now receding to the 1.3120 area, or daily lows.

GBP/USD focus on UK data

The better tone around the greenback is prompting month-end sellers in GBP to step in early in the European morning, driving Cable lower from its recent tops near 1.3160 recorded last week.

It’s been all about the Dollar in the last weeks, or more precisely, the weakness around the greenback, as the US political scenario still remains a source of uncertainty for the buck, while US data appears to always lack of a bit more to convince markets.

In the meantime, spot is trading in levels last seen in September 2016 above 1.3100 the figure, on a pretty solid performance ahead of the Bank of England meeting (Thursday) and July’s US Payrolls (Friday). In the nearer term, mortgage approvals, consumer credit are due later today, ahead of the more relevant manufacturing PMI, expected tomorrow.

On the positioning front, GBP speculative net shorts climbed to 3-week tops in the week ended on July 25, according to the latest CFTC report.

GBP/USD levels to consider

As of writing the pair is losing 0.03% at 1.3131 and a break below 1.3054 (10-day sma) would open the door to 1.2999 (low Jul.26) and finally 1.2995 (21-day sma). On the flip side, the next hurdle lines up at 1.3157 (2017 high Jul.27) followed by 1.3351 (high Sep.12 2016) and finally 1.3447 (high Sep.6 2016).