The GBP/USD pair witnessed aggressive selling on the European open, as the pound was dumped to near 1.2950 levels amid a renewed risk-off wave, before recovering some ground to now re-take 1.30 handle.
The bounce in the major is mainly driven by renewed optimism seen around the European equities, as dust settles over the Manchester blast aftermath. Meanwhile, markets appear to ignore downbeat UK public sector net borrowing data, therefore, having limited impact on the spot.
However, it remains to be seen whether cable can sustain the recovery from 1.2954 lows, as investors remain on the back foot, in the wake of the Manchester terror blast, which killed 22 people and injured nearly 50.
Also, increasing uncertainty over the upcoming UK general elections scheduled on June 8, especially after the UK PM Theresa May suspended the election campaign after the unevenful terror attack.
With the UK data out of the way, focus now remains on the UK inflation hearings and US datasets due on the cards in the NA session.
GBP/USD Levels to consider
Haresh Menghani, Analyst at FXStreet noted: “Below the said (1.2965) support, the pair is likely to accelerate the slide towards a short-term ascending trend-line support, currently near 1.2920 area. A follow through selling pressure below the trend-line support seems to open room for further downslide towards 1.2850-45 horizontal support before the pair eventually breaks below the 1.2800 handle and head towards testing its next major support near 1.2770-65 region.”
“On the upside, 1.3040-50 area remains immediate strong resistance, which if cleared decisively should lift the pair beyond the 1.3100 handle towards testing 1.3125-30 resistance area, marking 38.2% Fibonacci retracement level of the post-Brexit downslide,” Haresh added.