GBP/USD: Bulls struggle with 1.2575, risk-off back in vogue?

The rebound in GBP/USD from 1.2550 levels lost legs near 1.2575 region, knocking-off the rate slightly lower, as risk-off sentiment seeps back into markets.

A turnaround in risk sentiment is witnessed over the last hour, as investors turn cautious following the release of downbeat China’s home prices data and RBA April meeting minutes.

Further, broad based commodities’ sell-off combined with negative treasury yields fuel a renewed risk-aversion wave, which dents investors’ appetite for risk assets such as the equities, GBP etc.

However, loses appear capped amid fresh USD selling across the board, while investors gear up for a fresh batch of US economic data slated for release in the NA session amid full markets.

GBP/USD Levels to consider            

Momentum above 1.2599 (Monday’s high) could lift the pair above 1.2618 (Mar 27 high), beyond which a test of 1.2650 (psychological levels) is imminent. Conversely, a break below 1.2539/19 (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.