GBP/USD looks to regain 1.3950 as USD takes a breather
- DXY consolidates the recent rally ahead of US durable goods, GDP data.
- Cross-driven flows to have a significant bearing on the GBP ahead of ECB.
The bulls are seen trying hard to take on the GBP/USD pair back above the 1.3950 barrier, as head towards the European opening bells.
The spot remains better bid so far this Thursday, attempting a recovery from yesterday’s low of 1.3918 levels amid a pause in the USD rally across the board, as the 10-year Treasury yields take a breather from four-year peaks.
However, further gains appear capped, in response to the cross-driven flows, with the EUR/GBP cross trading firmer heading into the ECB monetary policy decision. Moreover, looming Brexit concerns continue to act as a drag on the pound, as the UK PM May is set to release a 50-page document detailing what Britain would like to see from the EU.
Also, increased nervousness ahead of Friday’s UK and US growth numbers keep a check on the recovery gains. In the meantime, the UK realized sales data and US durable good numbers will be eyed for fresh trading impetus.
GBP/USD levels to watch
Jim Langlands at FX Charts noted: “The hourlies are showing some minor bullish divergence, and the 4 hour momentum indicators are pointing a little higher, so as long as the 1.3915/25 area holds, we could see a squeeze up to 1.3950/70 ahead of 1.4000 and the Fibo level at 1.4025.although this looks unlikely to be seen again for a while. On the downside, a break of 1.3925 would allow a run to the mid-March lows at 1.3913/1.3890, below which there is not too much to stop a run to 1.3868/60 (76.4% of 1.3710/1.4376)/100 DMA.”