GBP/USD breaks higher to test 1.4120 amid risk-on
- Risk-on and subdued DXY sends Cable through 1.4100.
- Risk trends to dominate amid a quiet UK docket, with Halifax HPI the only release.
The GBP/USD pair broke the Asian side-trend to the upside in the early European trading, as the bulls cheer the risk-on market profile and subdued trading activity seen around the US dollar heading into a data-light session.
The risk-currency, the GBP, benefits from the persisting risk-friendly environment, reflected by the gains in the Asian indices, as markets moved past the looming concerns over the US-China trade spat. Also, the reports that Syria was attacked by airstrikes had little impact on the GBP markets.
On the other hand, the US dollar trades on a steady footing against its main competitors, as the markets remain unnerved and refrain from placing any directional bets ahead of the key risk events due on the cards this week, including the FOMC minutes and US inflation data.
Meanwhile, “today’s relatively thin economic docket, featuring the release of Halifax House Price Index (HPI) from the UK, is unlikely to provide any meaningful impetus, FXStreet’s Analyst Haresh Menghani notes.
GBP/USD levels to watch
According To Jim Langlands at FX Charts, “The short-term charts hint at a bull flag, which would have a target of somewhere around 1.4200 although ahead of that we will see offers at 1.4135/40 and at 1.4175. A break of 1.4200 would allow a return to the 27 Mar high of 1.4243 although that remains out of reach on Monday. On the downside, minor support will be seen at 1.4050/60 ahead of the 1.4000 pivot and the recent lows in the 1.3965/75 area.”