GBP/USD retreats from monthly tops amid Asia risk-off

The GBP/USD pair is seen on a gradual retreat from four-week highs reached just shy of 1.25 handle, as the USD bulls fight back control somewhat, in the wake of a correction from seven-week troughs struck a day before.

Moreover, cable finds fresh sellers in Asia on the back of tumbling Asian equities, as risk-off extends into Asia, with investors raising fresh concerns over Trump’s policies, as the US president struggles to bring healthcare reforms, implying that he may face troubles delivering on his promises over corporate tax cuts.

However, in the day ahead, the spot may find support from the latest headlines from the UK PM May, citing that she is expected to reject the second Scottish (Scexit) referendum, while yesterday’s upbeat UK CPI data will continue to underpin the sentiment around the pound.

Data-wise, the UK docket remains data-empty, and hence, focus shifts to the US existing home sales data lined up for release in the NY session.

GBP/USD Levels to consider            

Valeria Bednarik, Chief Analyst at FXStreet noted, “The 4 hours chart shows that technical indicators have lost upward momentum, turning flat in overbought territory, although given that the price holds near its daily high, chances of a downward corrective move are limited. In the same chart, the 20 SMA heads sharply higher some 100 pips below the current level, reflecting the strength of the intraday advance. The pair has settled above 1.2425 the 38.2% retracement of the January rally and the critical support, as the bullish stance will likely persists as long as the price remains above it.”