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GBP/USD testing key support at 1.3280, May’s visit to Brussels - key

  • USD – a wobble in holiday-thinned markets.
  • Weighed down by the UK confidence slump.
  • Eyes on the UK PM May’s visit to Brussels

Having failed to resist above the 1.33 handle earlier today, the GBP/USD pair drifted slightly lower, now consolidating in a tight range above the 5-DMA support of 1.3280.

GBP/USD: Eyes on BOE inflation report hearings and the UK Nov PMIs

The sentiment around Cable turned sour in the Asian trades after the US rates picked-up renewed strength, which dulled its attractiveness as a higher-yielding currency. Moreover, mixed trading seen in the Asian equities and oil prices also weighed down on the spot.

However, the losses remain capped amid a lack of fresh catalysts and thin trades on the back of the Thanksgiving lull. Meanwhile, the major also derives support from yesterday’s in line with expectations UK Q3 GDP revision as well as from stronger UK CBI realized sales data.

The GBP markets now await the sentiment on the European markets for fresh impetus, while the UK PM May’s visit to Brussels scheduled today will hog the limelight. The sentiment around the pound got a lift recently after PM May showed her willingness to raise her offer to secure a Brexit deal in December.

GBP/USD Technical Levels

Karen Jones, Analyst at Commerzbank, writes: “GBP/USD has reached key near-term resistance at 1.3338/43, the 50% retracement and the mid-October high. While it holds here (and we suspect that it will – we note the TD perfected set up), our attention remains on the 1.3076 2016-2017 uptrend. However, a move above 1.3343 (50% retracement) would trigger a deeper recovery to potentially 1.3466, the 2014-2017 downtrend.” 

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