GBP/USD stalls recovery, 1.3000 – a tough nut to crack

The GBP bulls are on the defensive amid persisting risk-averse market condition and underlying broad based US dollar strength, keeping any recovery in GBP/USD capped below 1.3000 levels so far this Wednesday.

GBP/USD headed to 50-DMA at 1.2946

Despite a bounce seen in Cable from a dip to 1.2970 levels at Tokyo-open, the bears continue to guard the 1.3000 psychological barrier, as risk-off remains at full steam on the latest bout of geopolitical tensions stemming from the Korean Peninsula.

North Korea noted on early Wednesday it is "carefully examining" plans for a missile strike on Guam, responding to the US President Trump’s comments that any threat to the US from North Korea would be met with "fire and fury".

Moreover, the extension of yesterday’s US dollar rally seen in Asia, in the wake of the stronger US JOLTS job openings data, also weighs down on the GBP/USD pair. The JOLTS that propelled the greenback - Nomura

 Meanwhile, looming concerns over Brexit combined with expectations of firmer US CPI data, keep the risks tilted in favor of downside in the spot. In the session ahead, the major will continue to get influenced by the broader market sentiment and USD dynamics amid a lack of fundamentals drivers from the UK docket.

GBP/USD levels to consider             

Valeria Bednarik, Chief Analyst at FXStreet noted: “In the 4 hours chart, the price settled below its 200 EMA for the first time in almost a month, while the 20 SMA accelerated its decline above the current level, now reinforcing the static resistance area around 1.3060. Technical indicators in the mentioned chart have managed to bounce from oversold readings, rather reflecting the late recovery than suggesting downward exhaustion, still holding within negative territory, limiting therefore chances of a recovery. Support levels: 1.2965 1.2920 1.2880 Resistance levels: 1.3005 1.3030 1.3060.”