GBP/USD comes down to 5-DMA ahead of Carney, Yellen

The GBP/USD pair stalled a 2-day recovery stint and turned negative in the Asian trades this Friday, despite a risk-friendly environment led by stronger Chinese CPI figures.

GBP/USD making lower highs on daily sticks

The cable fails to sustain at higher levels and come down to retest 5-DMA (resistance-turned support) located at 1.2238 in mid-Asia, as the ongoing upbeat momentum in the US dollar regains traction across the board on the back of rising treasury yields. Markets have almost priced-in a Dec Fed rate hike, which is reflected in a +2.5% rise in the 2-year treasury yields.

Moreover, Hard-Brexit worries and more BOE easing bets continue to weigh on the pound, keeping any recovery attempt in GBP/USD short-lived.

Looking ahead, markets eagerly await the US retail sales data and FOMC member Rosengren’s (dove-turned hawk) speech in the NA session, which will be followed by BOE Carney’s and Fed CHier Yellen’s speech.

GBP/USD Levels to consider            

The pair finds immediate resistances placed at 1.2262/63 (daily high), 1.2300 (round number) and 1.2365 (daily R2). While supports are lined up at 1.2200 (round figure) and 1.2130 (Oct 13 low) and below that at 1.2086 (Oct 11 low).