GBP/USD advances to highs above 1.22 ahead of UK data

The British Pound jumped to fresh highs vs. the Dollar above the 1.2200 handle early in the European morning, lifting GBP/USD to briefly test the 1.2250 area.

GBP/USD firmer ahead of UK releases

The pair is extending its consolidative theme on Wednesday, recovering the ground lost yesterday and challenging Monday’s tops in the 1.2255/60 band ahead of the UK’s jobs report due later in the session.

The now offered bias around the greenback is sustaining the better sentiment in the risk-associated universe, although expectations of a rate hike by the Federal Reserve at today’s meeting should keep gains contained. Recall that the probability of a 25 bp rate hike today is at above 90% according to CME Group’s FedWatch tool.

In the meantime, GBP should stay under pressure as the negotiations of the UK-EU divorce are set to kick in at some point in the next weeks. UK’s PM Theresa May is expected to trigger Article 50 anytime soon after the Parliament passed the Brexit bill on Tuesday.

In the US data space, and before the FOMC interest rate decision, inflation figures tracked by the CPI area due along with February’s Retail Sales, the NY Empire State index, the NAHB index and the EIA’s weekly report on crude supplies.

GBP/USD levels to consider

As of writing the pair is up 0.58% at 1.2222 and a breakout of 1.2256 (high Mar.15) would aim for 1.2327 (20-day sma) and finally 1.2374 (55-day sma). On the other hand, the next support lines up at 1.2106 (low Mar.14) followed by 1.2036 (low Jan.11) and then 1.1979 (2017 low Jan.16).