After having founding strong support near 1.2710 levels, the GBP/USD pair regained poise in the Asian trades, now accelerating the gain towards the next key resistance located at 1.2780, as dust settles over the UK general election aftermath.
GBP/USD: Will the buyers retail control?
The spot is back on the bids, despite mixed market sentiment and rallying treasury yields, as the GBP bulls make another attempt to take on the recovery from seven-week lows of 1.2632, in a bid to regain 1.28 handle.
The pound plummeted almost 130-pips against its American counterpart on Friday, after confidence in the UK PM Theresa May’s government was crumbled, as the snap election results showed a Hung parliament, with a coalition government formed with the Democratic Unionist Party (DUP).
However, uncertainty still prevails over the UK’s political scenario, despite a ‘Soft Brexit’ now a more likely outcome, which will continue to keep any recovery short-lived in the GBP/USD pair.
Focus now shifts back towards the economic fundamentals, with the key CPI and retail sales reports due on the cards from both the UK and US ahead of the FOMC and BOE monetary policy meeting scheduled later this week.
GBP/USD Levels to consider
Valeria Bednarik, Chief Analyst at FXStreet noted: “Technical indicators have resumed their declines after barely correcting extreme oversold readings, whilst the price remains far below its moving averages. 1.2705, February’s high is the immediate support ahead of the 1.2660, where the pair bottomed this past week. Support levels: 1.2705 1.2660 1.2620 Resistance levels: 1.2756 1.2800 1.2840.”