GBP/USD: Upside loses steam near 1.2550 as USD recovers

Having running into resistance just shy of 1.2550 levels, the GBP/USD pair has entered a phase of upside consolidation amid stalled USD selling across the board.  

A minor-bounce seen in the treasury yields across the curve provides some respite to the USD bulls, prompting a tepid-recovery in the greenback against most its major rivals.

Moreover, the spot fails to extend the upside break beyond 1.25 handle, despite a recovery in risk sentiment, following upbeat Chinese data releases, which somewhat lifted the broader markets sentiment.   

Also, the risk-currency GBP remains unperturbed by the US vice-president Pence’s comments, noting that he is heartened by early signs that China’s is willing to co-operate over the North Korean nuclear issue.

Nothing of note for the major in the day ahead, as low volumes and irregular volatility will persists amid holiday-thinned markets.

GBP/USD Levels to consider            

Momentum above 1.2575 (Thursday’s high could lift the pair above 1.26 handle, beyond which a test of March 27 high at 1.2618 is imminent. Conversely, a break below 1.2530/22 (5-DMA/ 200-DMA), leading to a subsequent break below 1.2480 horizontal support is likely to drag the pair towards testing its next support near 1.2425-20 zone.