GBP/USD back above 1.24… for how long?

Cable is back above 1.24 handle, but the question remains whether the pair would hold above 1.24 or European desks hit the spot with fresh offers.

‘Fat finger error’ – Reuters

As per latest report from Reuters, Sterling sell-off in Asia was triggered by a ‘fat finger’ error wich coincided with FT article about French President Hollande calling for ‘hard Brexit’.

Consequently, Hollande was initially blamed for the sell-off. However, this also means European desks may not hit the pair with fresh offers since ‘hard Brexit’ talk has been here for a while. Later in the day, possible strong US non-farm payrolls print could once again strengthen the offered tone around Cable.

GBP/USD Technical Levels

The spot was last seen trading around 1.2540. Round figures could continue to act as a support on the downside. If we plot Fib extensions on a move from July 2014 high – Apr 2015 low – June 2015 high suggests a strong support does exist around 1.2217 (141.4% Fibo extension).

On the higher side, 1.2458 (61.8% of Nov 2007 high – Jan 2009 low – July 2014 high) could act as a resistance, above which 1.26 could be put to test.