GBP/USD extends the rally to 1.2960, session tops

The Sterling keeps the bid tone well and sound during the second half of the week vs. the greenback, now sending GBP/USD to test daily highs around 1.2960.

GBP/USD in weekly tops

After bottoming out in the 1.2800 neighbourhood on Wednesday, Cable managed to reclaim some buying interest and has gained over a cent since then, currently hovering over multi-day peaks in the 1.2960/65 band.

The erratic performance around the buck despite Yellen left the door open for further tightening in the next months, somewhat diminishing concerns over Brexit and the slump in EUR/GBP have all collaborated to push spot further north of the 1.2900 mark as of late.

Looking ahead, the pair could come under renewed pressure in light of the release of US June’s inflation figures measured by the CPI, retail sales and the advance gauge of consumer sentiment.

GBP/USD levels to consider

As of writing the pair is up 0.15% at 1.2902 and a breakout of 1.2920 (10-day sma) would open the door to 1.2927 (23.6% Fibo of 1.2587-1.3032) and then 1.2984 (high Jul.6). On the flip side, the next down barrier aligns at 1.2876 (55-day sma) followed by 1.2840 (21-day sma) and finally 1.2809 (50% Fibo of 1.2587-1.3032).

In addition, the constructive stance seems unchanged while above the support line off March’s low (1.2106), currently just above 1.2700. The daily RSI (14) is hovering over 57 while the MACD still stays in the positive territory.