GBP/USD eases to 1.2940, dollar firmer

The British pound has eroded its initial gains and is now dragging GBP/USD to test the area of 1.2940.

GBP/USD attention to BoE

Spot is fading part of the decent gains posted on Friday following a pick-up in the demand for the greenback, as market participants continue to adjust the trade to June’s stellar Payrolls numbers (287K).

Focus will remain on the UK following the ‘Brexit’ vote and of course on the BoE’s MPC meeting due on Thursday. Expectations of a rate cut (currently at 0.50%) or further QE remain on the rise, although Carney could prefer waiting for the August meeting in order to assess better the consequences of the recent vote.

GBP/USD levels to consider

As of writing the pair is retreating 0.12% at 1.2936 facing the next support 1.2797 (low Jul.6). On the upside, the next hurdle lines up at 1.3118 (low Jun.27) followed by 1.3321 (23.6% Fibo of 1.5020-1.2796) and finally 1.3535 (high Jun.29).