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GBP/USD sits at weekly tops ahead of key US macro data

The GBP/USD pair extended its recovery move from two-week lows touched on Wednesday and is currently placed at fresh weekly tops near 1.2965-70 region.


Following the Fed Chair Janet Yellen's perceived dovish testimony, a softer tone surrounding the US Dollar helped the pair to build on its solid recovery led by surprisingly stronger UK labor market report released on Wednesday.


The pair so far has held in positive territory for the third consecutive session, gaining around 170-pips from the 1.2800 neighborhood, and might now be eyeing to reclaim the key 1.30 psychological mark ahead of the key US macro data. 


Today's US economic data - monthly retail sales and the latest CPI print, should influence market expectations over the Fed's monetary policy tightening cycle and provide fresh impetus for the pair's near-term trajectory.


   •  US: CPI and retail sales in focus – RBC CM


From a technical perspective, a strong follow through buying interest could trigger a short-covering rally and could assist the pair to dart back towards retesting recent highs resistance near the 1.3030 region.


Technical levels to watch


Momentum beyond 1.2970-75 zone could get extended towards reclaiming the 1.30 handle en-route 1.3030 area. A convincing break through the mentioned resistance, leading to a subsequent strength beyond yearly tops (mid-1.3000s), would pave way for continuation of the up-move further towards 1.3090-1.3100 resistance area. 


On the flip side, any weakness back below 1.2930-25 area, resistance turned support, might now find strong support near the 1.2900 handle, below which the pair would turn vulnerable to break head back towards 1.2840 horizontal support ahead of two-week lows support near 1.2810-1.2800 region.

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