GBP/USD revisits daily highs amid risk-on rally in equities

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 13, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Mumbai) - GBP/USD’s recovery from 1.4420 region picked-up pace over the last hours and the prices rebounded sharply higher to test daily highs.

    GBP/USD extends the recovery from 1.4419 lows

    The GBP/USD pair trades 0.13% higher at 1.4468, having reached fresh session highs at 1.4475 last minutes. The GBP bulls regained lost momentum and returned to the positive territory as the risk-on trades dominate Europe on the back of rising European equities. Hence, the persisting risk-sentiment boosts the demand for risk currencies such as the GBP.

    Moreover, the solid rebound seen in the oil prices on impressive Chinese crude imports, lifts the energy stocks on the UK’s benchmark index, the FTSE 100 and therefore, boosts the sentiment around the cable. The FTSE rallies 1.09% to 5,994.

    Looking ahead, amid a lack of fresh fundamental triggers for the major later today, markets will closely monitor developments around the oil markets, while the sentiment on the Wall Street will also play a crucial role.

    GBP/USD Levels to consider

    The pair has an immediate resistance at 1.4492/96 (5-DMA/ 1h 50-SMA), above which 1.4536/48 (1h 100-SMA/ daily R1) would be tested. On the flip side, support is seen at 1.4400 (psychological levels) below which it could extend losses to towards 1.4350 (Jan 12 Low).
    For more information, read our latest forex news.

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