GBP/USD: A phase of bearish consolidation below daily pivot

The cable extends its overnight side-trend into Asia, now oscillating in an extremely tight range below 1.26 handle, as the USD bulls take a breather heading into the US Q4 GDP release later today.

GBP/USD fell sharply a day before, immediately after the release of the UK Q4 prelim GDP estimate, as a jump in the US treasury yields triggered a fresh rally in the greenback across the board, while the US stocks at record highs on Trump reflation trades also boosted the buck. The USD index now trades modestly flat around 100.55, corrective massive gains booked yesterday.

However, yesterday’s GBP sell-off stalled ahead of 5-DMA support then located at 1.2540, as upbeat UK GDP data combined with Brexit Bill published by the UK PM May, lent some support.

GBP/USD Levels to consider            

At 1.2595, upside barriers are lined up at 1.2609 (daily pivot), 1.2643 (Jan 25 high) and 1.2697 (Dec 1 high). While supports are aligned at 1.2574 (5-DMA) and 1.2538 (daily S1) and below that at 1.2500 (round number).