Cable finally broke the overnight consolidation box to the upside and surpassed 1.2950 barrier in Asia. However, the bulls struggled hard to survive above the last amid moderate risk-aversion persisting across the financial markets.
GBP/USD: 5-DMA (1.2955) )a tough nut to crack in Asia
The renewed upside in GBP/USD appears to lack follow-through, as the greenback continues to hover near daily tops against most of its main competitors amid increased odds of a June Fed rate hike, despite less hawkish Fedspeaks (especially from Bullard).
However, the sentiment around the GBP remains underpinned, following the release of British Retail Consortium Like-for-like retail Sales for April 2017, which came in much stronger-than expectations at 5.6%.
All eyes now remain on the US JOLTS job openings data due later in the NA session, in absence of economic releases from the UK docket today. In the second half of this week, the BOE monetary policy decision accompanied by the quarterly inflation report will provide next direction on the spot.
GBP/USD Levels to consider
A break above 1.2990 (7-week high) could lift the pair above 1.3018 (classic R2/ Fib R3), beyond which a test of 1.3050 (psychological mark) is imminent. Conversely, a break below 1.2933 (10-DMA), leading to a subsequent break below 1.2900 (round figure) is likely to drag the pair towards testing its next support near 1.2868 (20-DMA).