GBP/USD rebounds towards 1.2840 ahead of Yellen

The US dollar witnessed fresh selling across the board over the last hour, prompting a recovery in the GBP/USD pair from a dip below 1.28 handle.

GBP/USD: Will it take-out 1.2840?

The spot stalled its Asian recovery mode and met aggressive selling post-European open, dipping momentarily below 1.28 handle. However, the bulls quickly regained momentum and took GBP/USD back above the last, now making headways towards the key upside barrier located near 1.2840 levels.

Looking ahead, further upside in Cable will solely depend on what the Fed Chair Yellen says on the monetary policy outlook at the Jackson Hole Symposium. Any hawkish signal on a Dec Fed rate hike is likely to spur a massive USD rally, knocking-off GBP/USD down to 1.2600/1.2580 levels.

The pair could also get influenced by the rub-off effect from the ECB President Draghi’s speech at the same event. In the meantime, markets await the US durable goods release for fresh trading impetus.

GBP/USD levels to consider             

Slobodan Drvenica at Windsor Brokers Ltd. noted: “Overall structure remains firmly bearish and sees upticks as selling opportunity for extension of larger downtrend towards targets at 1.2749 (Fibo 76.4% of 1.2588/1.3268); weekly Kijun-sen (1.2688) and 200SMA (1.2652).
Daily cloud base (1.2857) reinforced by falling 10SMA, marks solid resistance which is expected to cap recovery attempts. Res: 1.2836; 1.2857; 1.2871; 1.2912 Sup: 1.2793; 1.2773; 1.2749; 1.2715.”