GBP/USD to test the 1.3575-80 resistance zone amid sustained dollar selling bias

Sustained USD selling bias allowed the GBP/USD pair to gain traction for the second consecutive session and move back above mid-1.3500s as bulls look to seize control but the cable remains at the mercy of USD price dynamics. What’s more, thin liquidity conditions warrant some caution before placing directional bets, FXStreet’s Haresh Menghani reports.

Key quotes

“There isn't any major market-moving economic data due for release from the UK, leaving the pair at the mercy of the USD price dynamics. Meanwhile, the US economic docket features the release of Goods Trade Balance data, Chicago PMI and Pending Home Sales. This, along with the US stimulus headlines and the broader market risk sentiment, will be looked upon for some trading opportunities. That said, traders have little incentive to place fresh directional bets amid year-term thin liquidity conditions.”

“Any subsequent positive move is likely to confront resistance near the 1.3575-80 region. This is closely followed by the 1.3600 mark and double-top hurdle near the 1.3620-25 region. Bulls might wait for a sustained move beyond the mentioned barriers before placing fresh bets.”

“Immediate support is pegged near the 1.3520-15 region – marking the 23.6% Fibonacci level of the 1.3188-1.3620 recent strong move up. Failure to defend the mentioned support and a subsequent weakness below the key 1.3500 psychological mark might prompt some fresh technical selling.”