GBPUSD jumps back beyond 1.4000, Carney’s speech eyed

Analysis General

Published: 2/19/2018 4:55:00 AM

Fresh bids emerged once again below the 1.40 handle, allowing a tepid recovery in the GBPUSD pair back above the last, as broad-based US dollar recovery appears to have run out of legs over the last hours.

GBPUSD regains 20-DMA at 1.4017

The spot is seen reversing a part of intraday losses, mainly driven by the resurgent USD supply across its main competitors, with the DXY now giving up most of its gains to trade neutral just ahead of the 89 handle.

However, further recovery in Cable appears limited amid a turnaround in risk condition, reflected by a retreat in the European stocks and oil prices. Meanwhile, markets still remain jittery over the Brexit trade talks, especially after the weekend’s comments from European (EU) Parliament’s Chief Brexit coordinator Guy Verhofstadt. Verhofstadt stated that the UK's Brexit trade deal with the EU will not be finalized before exit day.

Moreover, increased nervousness ahead of the BOE Governor Carney’s speech due later today, could also keep the GBP bulls on the back foot, as attention also turns towards the UK jobs data and FOMC January meeting minutes lined up for release this week.

GBPUSD levels to watch

Haresh Menghani, Analyst at FXStreet notes, “Technically, a decisive break through the 1.4000 round figure mark, also coinciding with 38.2% Fibonacci retracement level of 1.3458-1.4345 recent up-move, is likely to accelerate the slide towards 1.3940 horizontal support en-route 50% Fibonacci retracement level support near the 1.3900 handle. Alternatively, sustained recovery back above mid-1.4000s could lift the pair back above the 1.4100 handle towards challenging the short-term descending trend-line resistance, currently near the 1.4125-30 region.”

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