GBP/USD fades a spike to 1.2270 amid poor liquidity

The pound added further 40-pips to its ongoing bullish run versus the greenback just ahead of China open, with GBP/USD now having reversed almost the entire pop higher to revert to familiar ranges around 1.2240 levels.

GBP/USD: UK CPI in focus

The bulls loosen grip somewhat, although remain in control in wake of persistent broad based US dollar weakness. While renewed optimism surrounding soft-Brexit landing after New Zealand and Britain successfully launched talks on a new free-trade deal as Britain prepares to leave the European Union early next year.

Moreover, thin market conditions also appear to exaggerate the upmove in the GBP/USD pair, as the major extends its recovery mode from 1.2135 troughs reached a day before. Also, higher commodities’ prices also underpin the sentiment around the risk currency GBP.

Focus now shifts towards the inflation report from both the economies due later in the day, especially after poor US economic data released on Monday.

GBP/USD Levels to consider            

The pair finds immediate resistances placed at 1.2273 (daily high), 1.2300 (round number) and 1.2328 (Oct 10 high). While supports are lined up at 1.2178 (daily low) and 1.2130 (Oct 13 low) and below that at 1.2086 (Oct 11 low).