GBP/USD has a re-look at sub-1.25 levels

Bid tone around the US dollar strengthened in Asia, pushing the GBP/USD pair to a session low of 1.2497. The two-day winning streak appears to have run out of steam at 1.2549 levels.

Supported by 5-DMA

The spot appears to have found support around 1.2497. The rise in the dollar demand is slightly surprising given the seven basis point drop in the US 10-year treasury yield on Thursday. The yield remains flat lined around 2.34% in Asia.

The UK data docket is thin; hence focus would be on the US-UK bond yield spread in Europe. Later in the day, US weekly initial jobless claims could influence the overall dollar demand.

GBP/USD Technical Levels

Break below 1.2497 (5-DMA) could yield a sell-off to 1.2458 (100-DMA) and 1.2433 (50-DMA). On the other hand, a breach of resistance at 1.2527 (10-DMA) would shift risk in favor a re-test of the session high of 1.2541. A violation there would signal continuation of the rally from Tuesday’s low of 1.2346 and open doors for 1.2674 (Jan 26 high).