GBP/USD is retracing its overnight gains on the day
The pair saw a wild run higher from levels just under 1.2500 to hit a high of 1.2643 in overnight trading, as month-end fixing flows drove wild moves in the currencies market.
The upside jump fell just short of testing the 200-day MA (blue line) and for the second time in recent trading, that is the key level that is limiting upside momentum in the pair.
Since then, it has been a bit of a trip lower to around 1.2550 levels currently as the pound retraces the flows from yesterday against both the dollar and the yen.
Amid thinner liquidity conditions in European trading today, it is hard to try and look too much into market movement so far today. North American trading later may provide more clarity but the key technical level above provided a good area for sellers to lean on.
For now, that downside retracement pressure is holding up but it’s still early in the day to write off buyers for the time being.
Key near-term support levels in cable are seen closer to 1.2500-20 before a test of the 100-hour moving average at 1.2471. Those will be key downside areas to watch, and sellers will need to break below that to drive further momentum lower from here.