GBP/USD closes terror-attack led bearish gap ahead of UK PMI
The GBP/USD pair filled in a 30-pips bearish opening gap induced by the London terror attack news, although failed to sustain at higher levels and reverted toward the familiar range near 1.2870 region just ahead of the UK services PMI release.
GBP/USD remains capped below 1.2900
The major attempted a minor-recovery so far this session from 1.2860 lows, as the greenback stalled its corrective move higher against its main rivals, while a pullback in treasury yields also lost momentum amid renewed political concerns surrounding Qatar.
A fresh risk-aversion wave gripped markets and weighed down on the higher-yielding currency GBP, as markets digest the London bridge terror attack and latest headlines over Saudi, Egypt and Yemen cutting ties with Qatar for protection of national security.
The bulls also continue to remain on the back foot ahead of the UK PM May’s Emergency Security Committee meeting due later today. Meanwhile, expectations of downbeat UK services PMI reading also dampens the sentiment around cable.
Markets also look forward to the US dataflow for fresh impetus, as all eyes remain focused on the upcoming UK general election due on June 8th.
GBP/USD Levels to consider
Haresh Menghani, Analyst at FXStreet noted: “Weakness below an immediate support near mid-1.2800s could get extended towards an important confluence support near 1.2770 area, comprising of 38.2% Fibonacci retracement level of 1.2365 to 1.3047 latest up-move and 50-day SMA region. The said support also coincides with a previous major resistance and hence, is the pair is unlikely to break the same in a hurry.”
“Alternatively, any up-move might continue to confront immediate resistance near the 1.2900 handle, closely followed by a strong hurdle near 1.2915-20 region (20-day SMA). On a sustained break through this important barrier, the pair is likely to aim towards 1.2965-70 horizontal resistance en-route the key 1.30 psychological mark,” Haresh added.