GBP/USD drops back towards 1.2400 as risk-off seeps-in

The ongoing recovery in the GBP/USD pair ran out of steam at the psychological levels of 1.2450, knocking-off the rate back towards 1.24 handle, as risk-off returned to markets amid a broad retreat in risky assets such as the European stocks, oil prices and treasury yields.

However, the renewed downslide in the major is likely to remain restricted as the greenback continues its corrective phase after yesterday’s rally triggered by hawkish FOMC dots.

On Thursday, the cable fell to three-week lows near 1.2380 after the BOE indicated in its statement that the interest rates could move in either direction next. The BOE kept is monetary policy settings unchanged yesterday, with benchmark rates held steady at 0.25%.

GBP continues to outperform alongside the USD – MUFG

GBP/USD Levels to consider            

In terms of technical levels, upside barriers are lined up at 1.2451 (daily high), 1.2470 (Nov 23 high) and 1.2500 (round figure). While supports are seen at 1.2372 (3-week low) and 1.2357 (Nov 23 low) and below that at 1.2308 (Nov 21 low).