GBP/USD: Fails to resist above 1.2500 amid negative equities

The bulls regained control over the last hour, allowing a fresh bounce in GBP/USD back towards 1.2500 levels amid stalled buying seen around the greenback versus its main competitors. The USD index faded a spike to 99.65 and now trades muted just ahead of the mid-point of 99 handle.

However, the renewed uptick appears to lack momentum amid extension of the risk-off trades into Europe, with the European equities joining the global sell-off and drowning in a sea of red.

Moreover, renewed worries over latest headlines, citing that the European Union (EU) will threaten Britain with court action if Theresa May refuses to pay £50bn Brexit divorce bill, also caps the upside in cable.

Meanwhile, markets digest the news that the UK PM May would reject the second Scottish (Scexit) referendum amid a lack of fresh fundamental drivers from the UK.

GBP/USD Levels to consider

Haresh Menghani, Analyst at FXStreet noted, “On a sustained move above the said handle, the pair is likely to accelerate the up-move towards 1.2525 intermediate resistance before darting towards 1.2570 (Feb. 24 high) ahead of 1.2600 round figure mark. A follow through buying interest has the potential to continue boosting the pair further towards 1.2630-35 resistance ahead of 2017 daily closing highs resistance near 1.2655-60 region.”

“On the downside, any corrective slide below 1.2440 level now seems to find immediate support at an important confluence resistance break-point near 1.2410 region, also coinciding with 100-day SMA. Failure to hold 1.2400 support area could extend the corrective slide towards 1.2340-35 support area, marking 23.6% Fibonacci retracement level of 1.2706-1.2109 downslide,” he added.

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