GBP/USD sticks to strong gains near 2-month tops post-US data
• Core PCE fails to impress USD bulls.
• Brexit optimism supports bullish GBP.
• US tax bill vote holds the key.
The GBP/USD pair held on to its strong gains near two-month tops and had a rather muted reaction the US economic releases.
Data released from the US showed personal spending eased to 0.3% in October, negating slightly better-than-expected personal income growth of 0.4%.
Meanwhile, core PCE price index, the Fed's preferred inflation gauge, showed signs of recovery and ticked higher by 0.2% m-o-m, with the yearly rate climbing to 1.4% in October as compared to previous month's 1.3%.
Separately, weekly jobless claims unexpectedly dropped to 238K during the week ended Nov. 24 but did little to provide any additional boost to the US Dollar.
Meanwhile, Brexit optimism continued underpinning the British Pound, with bulls aiming a move towards reclaiming the key 1.3500 psychological mark.
Next on tap would be the release of Chicago PMI, which along with Fedspeaks would be looked upon for some fresh impetus.
The key focus, however, would remain on developments surrounding the key US tax cut bill, with a full Senate vote expected on Thursday.
Technical levels to watch
Any profit-taking slide now seems to find immediate support near the 1.3435-30 region, which if broken could drag the pair back below the 1.3400 handle towards 1.3365-60 support area.
On the flip side, a clear break through the 1.35 handle now seems to pave the way for an extension of the pair's up-move the 1.3580 horizontal resistance ahead of the 1.3600 handle.