GBP/USD firmer, testing offers near 1.3000

 The Asian recovery seen in GBP/USD gained extra traction in the European session, sending the rate sharply higher in a bid to reclaim 1.30 handle.

GBP/USD trades just below 5-DMA at 1.2999

The spot extends its reversal from a drop-led by the overnight comments from the UK PM Theresa May and now looks to regain 1.3000 barrier amid a broadly subdued greenback as well as treasury yields. 

The latest leg higher in GBP/USD can be also seen as a result of positive London stocks and a renewed rally in oil prices, which underpin the risk-currency GBP. WTI refreshed fresh five-week tops at $ 51.88 levels, while Brent also hovers near multi-month highs of $ 54.62.

Focus now remains on the US existing home sales data due on the cards in the NA session, which is expected to provide impetus to the buck, eventually impacting the major. However, the reaction may remain limited ahead of the Fed minutes that will be published in the American afternoon.

GBP/USD Levels to consider            

Jim Langlands at FX Charts noted: “Back above 1.3000 would find strong resistance in the 1.3035/45 area, capped by last Thursday’s, 8-month high of 1.3047, but above which could run towards strong offers at 1.3075, and then further out, towards the long descending term trend resistance at around 1.3120. A break of this looks important and could lead to a quick run towards 1.3270 although that remains to be seen. A neutral stance is required today although I mildly prefer to trade from the short side, looking to sell rallies above 1.3000, with a SL placed above 1.3050.”