GBP/USD unable to find direction around 1.25
The GBP/USD pair stays confined in a narrow trading range on Wednesday around 1.25 handle. As of writing, the pair was trading at 1.2496, up 0.06% on the day, having posted a daily high at 1.2520 and a low at 1.2480.
The recent upsurge seen in the US Dollar Index was cut short on weak macro data. The budget deficit in the United States in March rose to $176 bln (vs. $150 bln expected) said the Financial Management Service on Wednesday.
On the other hand, the tensions rose between the United States and the Russian Federation as Russian Foreign Minister Sergei Lavrov argued that the attack on Syria by the U.S. Army was illegal before he met with U.S. Secretary of State Rex Tillerson. Although the tone in the joint press conference after the meeting seemed to be a little more neutral, the issues are still far from being resolved.
- U.S. Sec Tillerson: Our relations with Russia are at a "low point."
Earlier today, the macro data from the UK received mixed reactions as the jobless rate stayed unchanged at 4.7% but the number of people claiming jobless benefits rose by 25.5K. An empty UK economic docket on Thursday is unlikely to provide any fresh impetus for the cable, and the US Dollar Index's behavior could impact the GBP/USD price action.
- UK March jobs mixed: Claimant count surprises negatively, wages pick-up
Technical outlook
The pair could face the first resistance at 1.2560 (Mar. 31 high) before 1.2615 (Mar. 27 high) and 1.2700 (psychological level). On the downside, supports are aligned at 1.2470 (20-DMA), 1.2395/1.2400 (100-DMA/psychological level) and 1.2360 (Fib. 50% of Dec/Jan fall).
