GBP/USD Extends Recovery Towards 0.4200

GBP/USD Extends Recovery Towards 0.4200

28 March 2016, 12:15
Roberto Jacobs

GBP/USD Extends Recovery Towards 0.4200

Having bottomed out near 1.4120 region in the Asian trades, the GBP/USD pair regains ground, with 1.42 handle on sight.

GBP/USD testing offers near 1.4180

The GBP/USD pair rises 0.34% to 1.4173, trying hard to take 1.4180 barrier. The cable extended its recovery mode in a holiday-thinned European session and now aims to regain 1.42 handle, largely on a short-covering rally after last week’s extensive sell-off, triggered by renewed Brexit concerns and rising Fed rate hike bets this April/June.

Over the last couple of hours, the bullish grip on the GBP/USD pair strengthened as the US dollar took a breather in its recent upsurge and pared gains against its major peers. The greenback rose to more than one-week highs earlier on the day after a string of hawkish comments from Fed officials continue to bolster the case for April Fed rate hike.

Meanwhile, amid a holiday-quiet London calendar, focus now remains on the US PCE index, pending home sales and personal spending data, which may shed more light on the Fed rate hike prospects. While from the UK docket, BOE Chief Carney’s speech scheduled on Wednesday will be eagerly awaited for further momentum on the major.

GBP/USD Levels to consider

The pair has an immediate resistance at 1.4200 (round number), above which 1.4228/55 (Mar 23 High/ 1h 200-SMA) would be tested. On the flip side, support is seen at 1.4157/44 (1h 100-SMA/ 5-DMA), below that at 1.4103/00 (daily S3/ round figure).

(Market News Provided by FXstreet)

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