GBP/USD clings to gains near 1.2500 ahead of data

The Sterling maintains is positive tone at the end of the week, with GBP/USD up smalls around the 1.2500 handle.

GBP/USD focus on data

The pair has quickly faded the bull run to Thursday’s tops near 1.2580 following comments by US President Donald Trump and his plans to implement a tax reform (which he deemed as ‘phenomenal’) within the next 2-3 weeks.

Trump’s comments fuelled the demand for the greenback via the resurgence of the reflation/growth trade, which was the exclusive catalyst of the USD rally back in November/December.

Closer to home, UK’s Manufacturing/Industrial Production is due later, along with Construction Output and the GDP Estimate by NIESR.

GBP stays quite resilient despite the correction from yesterday’s peaks, as optimism among investors on the Brexit negotiations seems to be lending extra support to the Sterling and bolstering its demand. Additionally, the speculative community kept trimming its net shorts positions during last week, as seen in the latest CFTC report.

GBP/USD levels to consider

As of writing the pair is up 0.10% at 1.2511 and a breakout of 1.2585 (high Feb.9) would open the door to 1.2680 (high Jan.26) and finally 1.2715 (high Feb.2). On the flip side, the immediate support aligns at 1.2477 (20-day sma) followed by 1.2433 (55-day sma) and finally 1.2344 (low Feb.7).