GBP/USD extends recovery above 1.2400, will it sustain?

Despite a pick-up in broad USD demand and negative European equities, the GBP/USD pair takes on its recovery above 1.24 handle, as markets look to unwind their GBP shorts ahead of a Big week ahead of the GBP markets.

However, it remains to be seen whether the spot can manage to survive above 1.24 handle, as the greenback crawls back towards three-week tops versus its major rivals. Moreover, risk sentiment appears to deteriorate amid negative performance seen on the European equities, which could weigh down on the risk currency – GBP.

Markets now look forward to a slew of key macro updates due later this week from both the UK and US for fresh impetus on the spot. The UK docket offers the CPI, jobs and BOE Mark Carney’s speech in the lead up to the Easter holidays, while from the US, we have the CPI, PPI, consumer sentiment and retail sales data.  

Meanwhile, the immediate focus now remains on the US LMCI data and Yellen’s speech due later on Monday.

GBP/USD Levels to consider            

Haresh Menghani, Analyst at FXStreet notes, “mid-1.2400s area should now attract fresh selling pressure and hence should cap any near-term recovery move. Bears would be eyeing for a sustained weakness below 50% Fibonacci retracement level support near 1.2360-65 area, below which the pair is likely to accelerate the slide towards 1.2325 horizontal zone, en-route 61.8% Fibonacci retracement level support near the 1.2300 handle.”