GBP/USD on a steady recovery path near 1.3150, US data eyed

• Eyes on widening US-UK yield spread.
• US Core CPI data in focus.
• BOE holds the key this week

The GBP/USD pair is extending its gradual recovery mode into Europe, having found fresh bids near 1.3125 during the Asian trades amid broad based USD weakness.

GBP/USD: Will BOE disappoint the hawks?

The spot found renewed impetus from the latest WSJ report that cited Trump leaning towards Powell as the next Fed Chair, which kept the sentiment around the greenback and Treasury yields undermined.

Moreover, a bout of profit-taking in the US rates after last week’s upsurge to multi-month tops, and ahead of the key FOMC decision this week, also aided the recovery in the GBP/USD pair.

Meanwhile, the pound also benefited from increased expectations of a BOE rate hike this week, especially after the solid UK Q3 prelim GDP report released last Wednesday. Ahead of the key central banks’ events, the pair awaits the UK net lending to individuals data and US core PCE index for fresh momentum.

GBP/USD Technical View

Haresh Menghani, Analyst at FXStreet explains: “Any further up-move beyond 1.3160 horizontal resistance is likely to confront fresh supply near the 1.3200 handle and is closely followed by a strong hurdle near the 1.3225-30 region. On the flip side, retracement back below the 1.3100 handle might continue to find strong support at 100-day SMA, currently near the 1.3065 region, which if broken would confirm a bearish breakdown and accelerate the fall towards the key 1.30 psychological mark.”