GBP/USD supported at 1.4600 amid risk-on rally in equities

The GBP/USD pair extends corrective mode into a third-day this Monday, although manages to find some support at 1.46 handle, as bulls defend the last heading into holiday-thinned session.

GBP/USD: Upside capped by daily R1

Currently, GBP/USD trades -0.18% at 1.4612, unable to extend its recovery beyond 1.4630 region. The cable keeps losses and remains vulnerable to further downside as the US dollar is expected to remain in demand across the board on increasing expectations of a Fed rate hike as early as next month after Fed Yellen’s said Friday that a Fed rate hike was appropriate in the ‘coming months.’

Moreover, uncertainty surrounding a Brexit vote also gains more prominence as we remain less than month away from the EU referendum, weighing further on the sentiment around the GBP. In absence of fundamental drivers in the day ahead, as both the US and UK markets remain closed in observance of their respective public holidays, and hence, focus now shifts towards the PMI reports from the UK and the US payrolls data due later this week.

GBP/USD Levels to consider

The pair has an immediate resistance at 1.4648/50 (Round number/ psychological levels), above which 1.4700 (Round number) would be tested. On the flip side, support is seen at 1.4600/1.4591 (daily low/ 1h 200-SMA) below that at 1.4515 (20-DMA).