GBP/USD regains 1.2950 as DXY refreshes 15-month lows

The GBP/USD pair extended its steady rise into early Europe, with the bulls now poised to test 1.3000 levels on a breach of 1.2950 barrier.

GBP/USD awaits Brexit clarity and UK manufacturing PMI

The renewed uptick seen in Cable is mainly driven by a fresh bout of selling interest seen behind the US dollar against its main peers, as the European traders hit their desks and prefer to do away with the higher-yielding assets such as Treasury yields, digesting the overnight reports of the North Korean missile launch.

Meanwhile, the USD index extends its downward trajectory to print fresh fifteen-month lows at 92.06, tracking the US rates lower, which are down -0.40% to -1.35%.

Moreover, a short-covering rally in GBP/USD cannot be ignored, after last week’s sell-off to 1.2771 levels, as investors look to clear out GBP shorts ahead of the third round of Brexit negotiations with the EU starting later this week.

Also, attention now turns towards the US macro releases due later in the week ahead, especially the employment data, which will have major impact on the spot. In the meantime, markets await the US consumer confidence figures due later today, as the pair shrugged-off weaker-than expected UK nationwide HPI data.

 GBP/USD levels to consider            

Haresh Menghani, Analyst at FXStreet explains: “the pair is likely to accelerate the up-move towards reclaiming the key 1.30 psychological mark before eventually darting towards its next strong resistance near the 1.3030-35 region. Conversely, rejection from current resistance area, and a subsequent weakness back below the 1.2900 handle would negate the bullish tilt and turn the pair vulnerable to head back towards testing an ascending trend-line support near the 1.2800-1.2790 region with some intermediate support around 1.2760 level.”