GBP/USD off-lows, reverts to 5-DMA on BOE news

The GBP/USD pair stalled its Asian retreat near 1.3020 region and embarked upon a minor-recovery mode in Europe, despite the latest headlines from BOE on reverse auction shortfall.

GBP/USD keeps gains above 1.3000

Currently, GBP/USD rallies +0.33% to 1.3045, recovering a brief dip to session lows reached at 1.3024. The major caught a sudden bid wave last hour, as the pound appear to have ignored the BOE’s headlines that it plans to incorporate yesterday’s GBP52 million auction shortfall in H2 of plan.       

Monday’s reverse auction shortfall underscores concerns that there are no willing bond sellers in the markets, with the pension funds apparently unwilling to sell them. Hence, this turns out to be sort-off a vote of no confidence in the sterling.

Meanwhile, markets also digest the BOE Agents' summary of business conditions, which revealed negative impact of Brexit on the services sector as well as on the hiring turnover.

Calendar-wise, focus now shifts towards the US JOTLS jobs data, which is expected to provide further momentum on the major.

GBP/USD Levels to consider                           

The pair has an immediate resistance at 1.3091 (daily top), above which 1.3151 (daily R3) would be tested. On the flip side, support is seen at 1.3000 (round number) below that at 1.2957/53 (Aug 9 low/ daily S1).