GBP/USD has a relook at 1.25 handle, focus on Trump-Xi meeting

The broad based USD weakness saw GBP/USD have a relook at 1.25 handle, although caution ahead of the Trump-Xi meeting is making sure the psychological hurdle is a tough nut to crack.

The spot was last seen trading around 1.2490.

The British Pound was a top performer on Wednesday, largely due to the strong UK services PMI release. Meanwhile, the USD was surprisingly offered across the board even though the Fed minutes showed he policymakers are considering trimming in the balance sheet size later this year.

Focus on Trump-Xi meeting

The meeting of the ‘polar opposites’ and Trump’s unpredictable nature is likely to keep the treasuries well bid. Thus, GBP/USD may have a hard time extending gains.

Furthermore, stocks are on the retreat from Sydney to Seoul on concerns that the reduction in the Fed’s balance sheet size and rate hikes could lead to a sharp rise in the treasury yields. The risk-off tone could keep a lid on the gains in the GBP/USD. 

GBP/USD Technical Levels

A break above 1.25 (zero figure) would expose 1.2522 (resistance offered by the trend line drawn from Mar 14 low and Mar 29 low), which, if breached could yield a rally to 1.2556 (Mar 31 high). On the downside, breach of support at 1.2479 (session low) would open doors for 1.2423-1.2419 (50-DMA + 100-DMA) and 1.24 (zero levels).