GBP/USD pulls back from 2-month highs

GBP/USD pulled back during the New York session and retraced its intraday gains as the dollar strengthened amid hopes of a rate hike by the Fed next week.

GBP/USD retreated from a 2-month high of 1.2773, with the upside capped ahead of the 100-day SMA, although Cable continues to find support at the 1.2700 area. At time of writing, the pair is trading at 1.2715, down 0.1% on Tuesday.

Last Friday solid US employment data supported the case for the Fed to raise rates at its next meeting that concludes on Dec 14. The US Labor Department reported nonfarm employers added a seasonally adjusted 178,000 jobs in November, above 175,000 expected, while the unemployment rate fell to 4.6%, its lowest level since August 2007.  

However, the pound has shown resilience supported by domestic data and the risk-on environment, having risen for five straight days till Monday.

GBP/USD levels to consider

In terms of technical levels, immediate resistances are seen at 1.2773 (Dec 6 high), 1.2793 (100-day SMA) and 1.2859 (Oct 4 high). On the other hand, supports could be found at 1.2624 (Dec 5 low), 1.2569 (Dec 2 low) and 1.2548 (10-day SMA).

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