GBP/USD: Will the buyers retain control ahead of BOE’s FSR, Carney speech?
- DXY recovery stalls in Asia.
- Supported at hourly 100-SMA.
- Plenty of risk events ahead.
Fresh bids emerged at the hourly 100-SMA support of 1.3310 in early trades that allowed a tepid-recovery in the GBP/USD pair, as attention shifts towards the BOE Financial Stability Report (FSR) and Governor Carney’s speech due later today.
GBP/USD flirts with 5-DMA at 1.3323
Cable remains better bid so far this session, having stalled its corrective slide from seven-week tops of 1.3382, as the broad-based US dollar recovery appears to lose steam amid cautious sentiment persisting in the market ahead of the Fed Chair nominee Powell’s Congressional testimony and US Senate tax vote.
The USD bulls await fresh impetus from Powell’s testimony, as his speech could suggest how he intends to run the central bank, while his prepared testimony released on Monday, suggested that Powell is likely to stick to the monetary policy the Fed has pursued under Yellen, whose term expires in February.
In the US last session, the spot came under heavy selling pressure, as Brexit jitters resurfaced, following the comments from the Irish Foreign Minister Coveney, citing that he is confident the senior EU officials won’t proceed with the next phase of the Brexit talks unless there is some clarity on the Irish border issue.
Focus now shifts towards the UK bank stress test results and BOE FSR report due out in early Europe ahead of the BOE Governor Carney’s speech. Also, the Fed Chair-designate Powell’s testimony and second-liner macro news will be closely eyed for fresh incentives on the USD.
GBP/USD Technical Levels
According to Valeria Bednarik, Chief Analyst at FXStreet, “the downside potential remains limited, as in the 4 hours chart, the pair is still firmly above a bullish 20 SMA and within an ascendant channel, while technical indicators remain within positive territory, with no clear directional momentum. The base of the channel comes at 1.3300/10 for the upcoming sessions, but a more relevant support is located at 1.3280, with a break below this last required to see the pair correcting lower. Support levels: 1.3310 1.3280 1.3240. Resistance levels: 1.3380 1.3420 1.3450.”