FXStreet (Mumbai) – The GBP/USD pair saw a relief rally in the Asian session after dropping sharply to the lowest levels since April on Tuesday.
GBP/USD ignores oil weakness
The GBP/USD pair trades 0.12% higher at fresh session highs of 1.4839, having found renewed strength around 1.4815 levels. The cable manages to recover lost ground somewhat and extends its recovery mode above 1.48 handle on the back of risk-on sentiment persisting in Asia spurred by higher global equities.
Moreover, mixed US dollar trading against its major competitors also lends support to the much-need pullback in the cable. Meanwhile, the pound is likely to remain pressured heading into the New Year on divergent central banks’ monetary policy outlooks especially after the surprisingly dovish comments from BOE policy maker Martin Weale last week. Mr. Weale, a BOE hawk, said that the BOE shouldn’t raise rates in 2016 as wage pressures remain subdued.
In the day ahead, in absence of first-tire economic data, markets will pay attention to the UK’s Nationwide house prices indices for December and the pending home sales data from the US. While developments surrounding oil and the broader market sentiment will also play a key role today.
GBP/USD Levels to consider
The pair has an immediate resistance at 1.4868 (1h 50-SMA), above which 1.4882/90 (5-DMA/1h 200-SMA) would be tested. On the flip side, support is seen at 1.4815 (Dec 23 & Today’s Low) below which it could extend losses to 1.4787 (Dec 29 Low).
(Market News Provided by FXstreet)