GBP/USD stuck in 30-pips tight range ahead of US core PCE
- DXY advance caps further upside
- Cable underpinned by Brexit optimism.
- The US core PCE index holds the key.
Having refreshed nine-month tops at 1.3480 levels, the GBP/USD has entered a phase of consolidation amid a lack of significant drivers, with the focus now shifting towards the Fed’s most preferred inflation gauge slated for release in the American session.
GBP/USD: 1.3500 still in sight?
The bulls are seen gathering pace for a test of 1.35 handle, awaiting fresh impetus from a fresh batch of economic releases from the US docket, with the key one being the core PCE price index.
The sentiment around the pound remains buoyed on hopes of a Brexit deal soon to be reached, with the Times having reported overnight that Britain nears a deal with the EU in Irish border Brexit talks.
However, the latest comments from the Irish Agriculture Minister, citing that Ireland has seen no bespoke deal yet from the UK, leave the bulls struggling near the midpoint of 1.34 handle.
Next of relevance remains the US macro news and Fedspeaks, which will help the pair to find the next direction.
GBP/USD Technical Levels
According to Slobodan Drvenica at Windsor Brokers Ltd., “bullish signal was generated after today's rally made a firm break above important 1.3415 resistance (Fibo 61.8% of 1.3655/1.3026 descend). A sustained break above 1.35 barrier would open the way towards 1.3655 (2017 high, posted on 20Sep) to mark full retracement of 1.3655/1.3026 corrective phase). Bullish studies support the advance, but corrective action could be anticipated as daily indicators are at the border of overbought territory. Corrective dips are expected to offer better levels to re-join the rally. Res: 1.3506; 1.3570; 1.3600; 1.3655. Sup: 1.3415; 1.3404; 1.3337; 1.3315.”