GBP/USD fades a spike above 1.2600 as FTSE slumps 1%

The GBP/USD pair managed to take out yesterday’s high at 1.2600 levels, although failed  to resist above the last, as a sharp sell-off in the London stocks spooked market sentiment and exerted downward pressure on the risk currency GBP.

London’s benchmark index, the FTSE 100, drops over 1% so far this session, mainly dragged by steep losses in the mining shares, as base metals and gold prices remain under heavy selling pressure.

Meanwhile, the US dollar stalled its downslide and reverted to the familiar range around 100.20 against its main peers, collaborating to the renewed weakness in cable.

Looking ahead, the major will get influenced by the upcoming US housing and industrial production data amid a lack of fundamental drivers form the UK docket today.

GBP/USD Levels to consider            

Momentum above 1.2618 (Mar 27 high) could lift the pair above 1.2650 (psychological levels), beyond which a test of 1.2680/86 (Jan 26 & Feb 2 high) is imminent. Conversely, a break below 1.2544/19 (5 & 200-DMA), leading to a subsequent break below 1.2489/88 (10 & 20-DMA) is likely to drag the pair towards testing its next support near 1.2425-20 zone.