GBP/USD rebounds to 1.2920 amid fresh USD selling

GBP/USD is seen attempting bids above 1.29 handle once again, reversing a dip to lows struck at 1.2888 on a weaker start to the European markets.

GBP/USD looks to test 10-DMA support of 1.2875 next

Risk-off moods appear to have eased a bit, with oil prices recovering ground alongside the European equities and treasury yields, which helps the renewed upside in the spot.

Moreover, cable’s recovery also gained traction after the US dollar met fresh supply across the board, sending the USD index back to test seven-month lows of 96.47.

However, it remains to be seen if the buyer can retain control above 1.29 handle, as we remains just a day ahead of the UK election. The UK PM May’s Conservatives Party is widely expected to fall short of majority, which could result in a hung parliament and eventually a big negative for the pound.

The British currency may lose even in the case the UK PM May wins the election, as markets believe Theresa May’s win is likely to pave the way for a ‘Hard Brexit‘ landing.

Also of note for the major remains the former FBI director Comey testimony scheduled tomorrow, which will provide next direction on the greenback.

Meanwhile, in the day ahead, broader market sentiment and USD dynamics will continue to influence GBP/USD amid a lack of fundamental catalysts.

GBP/USD Levels to consider            

Jim Langlands at FX Charts noted: “The immediate points to watch are unchanged, and on the downside the initial support will arrive at 1.2875 and at 1.2855. Back below 1.2830 would retest 1.2800 and the 31 May low of 1.2768, albeit probably not today. If wrong, under here could revisit minor support at 1.2750/55 but a break of which there is little to hold Cable up until 1.2685/90.”

“On the topside, Cable reached 1.2950 in early Europe but was unable to carry on due to plenty of selling interest, and instead, it headed back below 1.2900 in choppy trade. A break of 1.2950 though could then lead to 1.2980, ahead of 1.3000, and a possible retest of 1.3015 and eventually 1.3047,” Jim added.