GBP/USD finds decent support ahead of 1.32 handle
• Once again fails to sustain above 50-DMA post-BOE inflation hearings.
• Better-than-expected UK CBI data helps defend 1.32 handle.
Having posted a session high level of 1.3267, the GBP/USD pair ran through some fresh offers and refreshed daily lows in the past hour
The latest bout of volatility over the past couple of hours could be attributed to mixed comments coming out of the BOE policymakers' testimony on inflation and the economic outlook before the Treasury Select Committee.
• BOE’s Cunliffe: UK inflation to peak in Q4 this year
• BOE’s Saunders: Pass through from GBP’s depreciation over the last 18 months is far from over
• BOE’s Vlieghe: GBP prices are expected to stay where they are
The pair once again failed to build on early up-move beyond 50-day SMA and retreated sharply, albeit now seems to have found a decent support just ahead of the 1.3200 handle. The release of UK CBI Industrial Trends Orders data, coming in at 17 for November as against expectations for a reading of 3, extended some support and helped the pair to bounce back to the 1.3235 region.
It would now be interesting to see if the pair continues facing difficulty in sustaining above 50-day SMA or bulls are able to regain control amid a modest pickup in the US Dollar demand.
Later during the NA session, the existing home sales data from the US would now be looked upon for some fresh impetus. Also in focus would any news over UK's proposal to increase its offer for the so-called EU divorce bill.
Technical levels to watch
Weakness below the 1.3210-1.3200 region could get extended towards 100-day SMA support near the 1.3125 region en-route the 1.3100 handle.
On the upside, 1.3260-80 zone remains immediate strong supply zone, above which the pair is likely to surpass the 1.3300 handle and aim towards testing mid-Oct. swing high resistance near the 1.3335-40 region.