GBP/USD dips to lows near 1.2540 as USD-recovery picks-up pace

The US dollar caught a fresh bid tone in the European session versus most of its main competitors, dragging the GBP/USD pair to lower in a bid to hit fresh session lows of 1.2540.

The spot meets fresh supply as the European traders book profits on their USD short positions ahead of the Easter break. The US dollar fell sharply across the board in the last NY session, after the US President Trump made dovish remarks on the monetary policy and said that the ‘USD is getting too strong’.

The sentiment behind the pound also worsened after the BOE Credit Conditions Survey showed that that the lenders expect to tighten supply of unsecured consumer credit. However, the losses may remain capped, as the US treasury yields continue to remain deep in the red, as attention now shifts towards the US PPI, consumer sentiment and jobless claims data slated for release in the NA session.

GBP/USD Levels to consider            

Slobodan Drvenica at Windsor Brokers Ltd notes, “technicals on daily chart remain in firm bullish mode and favor final push towards next targets and key barriers at 1.2613/27 (27 Mar high / 200SMA). However, consolidation may precede fresh rally, as daily slow stochastic is overbought (no firmer bearish signal for now). Ascending converged daily 10/20 SMA’s offer solid support at 1.2476/67 zone which should contain extended downticks. Res: 1.2572; 1.2594; 1.2613; 1.2627 Sup: 1.2527; 1.2500; 1.2470; 1.2425.”