GBP/USD: Recovery remains capped near 1.3570, Carney eyed

Having found fresh buyers once again near 1.3535 region, the GBP/USD pair made another recovery attempt above the midpoint of 1.35 handle, but the sellers continue to lurk above the last.

GBP/USD headed to 1.3500?           

The spot printed fresh fifteen-month tops at 1.3619, but failed to sustain at higher levels and fell sharply below the 1.36 handle, as markets seek to book profits on their GBP longs ahead of the UK retail sales data and FOMC interest rates decision due later in the week ahead.

Also, investors remain wary ahead of the BOE Governor Carney’s speech scheduled later today, raising doubts whether the BOE Chief would stick to its recent hawkish bias today. BOE Governor Carney noted at the BOE presser last week that the possibility of a rate hike had definitely increased, which prompted a massive 500-pips rally in Cable, sending it to the highest levels seen since July 2016.

However, over the last hours, the major manages to derive some support on the back of stalled USD recovery across the board and higher European equities. In the session ahead, it remains to be seen if the pair keeps its corrective slide intact amid a data-light US calendar and ahead of the BOE Governor Carney’s speech.

GBP/USD levels to consider             

Valeria Bednarik, Chief Analyst at FXStreet, writes: “Technically, the 4 hours chart for the pair shows that the price is far above its moving averages, with the 20 SMA around 1.3410, too far away to be relevant at the time being. Indicators in the mentioned chart are correcting extreme overbought conditions, supporting the case for a downward corrective move. Nevertheless, the pair is long-term bullish, and speculative interest will likely add to long on dips.”

“Below 1.3520, the downward corrective movement can extend down to 1.3480/90, and later towards the 1.3440 region. Resistances come at 1.3565, with gains beyond it opening doors for a retest of the daily high at 1.3618,” Valeria adds.