GBP/USD takes a U-turn from 2-week tops near 1.2980

The renewed uptick seen in the GBP/USD pair appears to have lost steam near the 50-DMA resistance located at 1.2983 levels, with the bears now pushing the rate back towards the midpoint of 1.29 handle.

GBP/USD tests 50-DMA, then retreats

Broad based US dollar weakness remains the main theme so far this session, further fuelled by an extension of the sell-off in Treasury Yields, which drove the GBP/USD pair to the highest levels in two weeks at 1.2978 levels.

However, the spot quickly reversed a part of the rally to hover around 1.2960 region, as persisting risk-off trades seen in the European equities, continued to undermine the sentiment around the risk currency GBP. The European stock markets are down -1.35% to -1.70%.

In the day ahead, the major will continue to take cues from the sentiment on the Wall Street and US consumer confidence data, as persisting risk sentiment will remain the major driver until US employment numbers due on the cards later this week.

GBP/USD levels to consider             

Senior Technical Analyst at Commerzbank, Axel Rudolph, explained: “We are still of the opinion that the 1.3267 current August high was the end of a medium term up move. While trading below the next lower 1.3031/49 May and August 11 highs overall downside pressure will be maintained. Further resistance sits at the 1.3126 July 18 high. The 1.2775/59 support zone consists of the December 2016, late April and late May lows. Below it sit the 50% retracement and 200 day moving average at 1.2688/59”.