The GBP/USD is trading up above the 1.3400 handle ahead of the upcoming London market session after being buoyed by improved risk sentiment.
The Sterling is bumping into fresh highs for the month after bottoming out on May 29th at a low of 1.3204, and the GBP/USD is now peaking just above the 1.3400 major level. The upcoming Wednesday sees a couple of speeches from Bank of England (BoE) Monetary Policy Committee (MPC), with MPC member Silvana Tenreyro speaking at 10:40 GMT, and MPC member Ian McCafferty speaking at 16:00 GMT.
Little else is on the docket for the London session, and traders’ focus will be shifting to the upcoming US Trade Balance figures (forecast $-49 billion, prev. $-49 billion), alongside Nonfarm Productivity (forecast 0.6%, prev. 0.7%) and first quarter Unit Labor Costs (forecast 2.8%, prev. 2.7%), all dropping at 12:30 GMT.
Broader Dollar weakness on the back of improving market sentiment could prove to be a boon for the hurting Pound, which may get bolstered further on the news that the European Central Bank (ECB) may be getting closer to being willing to discuss the idea of preparing for QE winddown. Still a far cry from definitive action from the central bank, but news that will definitely send traders into the buy button across the European continent, and dragging the GBP higher as a result.
GBP/USD levels to watch
As noted by FXStreet’s own Valeria Bednarik, “technically, the pair keeps pushing higher, and while a definitive breakthrough is yet to be seen, readings in the short-term support additional gains ahead. The 4 hours chart shows that the pair met buyers around a mild bullish 20 SMA, while technical indicators have bounced again from their midlines, maintaining strong upward slopes and with the RSI indicator reaching fresh weekly highs, all of which supports additional gains, particularly on a break above 1.3420, now the immediate resistance.