GBP/USD erases daily losses, still under 1.3000

The pound gained momentum in the market during the last hours and trimmed losses across the board. Cable rose back toward Friday’s closing price and moved off lows bus still remained below 1.30.

GBP recovers

While EUR/GBP started to retreat after approaching 2016 highs, GBP/USD accelerated the recovery.

Earlier the pound fell to test last week lows against the US dollar but managed to hold on top of 1.2910/15. From there rose to the upside and recently climbed to 1.2980. It was trading at 1.2970 around the same level it closed on Friday.

Economic data today showed a decline in US new home sales in August to an annual rate of 609K, (-7.6%). The sharp decline was lower-than-expected but it had no impact on the US dollar. Regarding the US dollar, traders continue to analyze last week event (FOCM meeting) while in the UK, sentiment around Brexit continues to weigh on the pound.

GBP/USD levels to consider

To the downside, support could be seen at 1.2960 (20-hour moving average), 1.2912 (low Sep.23) and 1.2863 (Aug 15 low). On the other hand, resistance could be seen at 1.2985 (daily high), 1.3000 (psychological) and 1.3045/50 (Sep 21 high).