GBP/USD gives up gains, challenging 1.2500

The British Pound is now losing further ground, dragging GBP/USD to test the area below the 1.2500 handle.

GBP/USD offered on USD-buying

Spot came under renewed selling pressure in response to a strong broad-based rebound in the greenback, which lifted the US Dollar Index (DXY) back to the 101.00 neighbourhood.

In spite of the pick up in USD, the Sterling is clinging to its daily gains for the time being, always supported by UK fundamentals and subsidized fears of a ‘hard Brexit’ outcome from the imminent Brexit negotiations. Recall that PM Theresa May is expected to trigger Article 50 in early March.

In the meantime, and according to the latest CFTC report, the speculative community has added further shorts to the net short position during the week ended on February 7, climbing to the highest level in the last three weeks.

In the data space, UK’s inflation figures are due tomorrow, ahead of the labour market report on Wednesday and Retail Sales on Friday. Across the pond, Chief J.Yellen’s testimonies will grab all the attention seconded by US inflation figures tracked by the CPI and further Fedspeak.

GBP/USD levels to consider

As of writing the pair is up 0.03% at 1.2494 and a breakout of 1.2572 (high Feb.7) would open the door to 1.2680 (high Jan.26) and finally 1.2715 (high Feb.2). On the flip side, the immediate support aligns at 1.2436 (low Feb.10) followed by 1.2344 (low Feb.7) and finally 1.2250 (low Jan.19).