The GBP/USD opened in Asia around 1.9980 after failing to maintain a foothold above 2.0000 during the US session. The GBP/USD could only manage a 1.9977/90 range during a deadly quiet Asian session with two-way business out of Tokyo keeping the pairing hemmed within a narrow range. The EUR/GBP was a similar story with the cross staying below the 200-day MA around 0.6741 and trading in a 0.6733/40 range.
Sentiment towards the GBP remains bullish, as the market is preparing for the BOE to hike rates next week and keep the GBP a main beneficiary of ongoing demand for JPY-funded carry trades. There have been a few bouts of carry trade unwinding that has resulted in shallow corrections lower in the GBP/JPY, but support around 246.40 continues to hold on dips as it did today in Asia.
There is talk of stops above 2.0010 in the GBP/USD that remain in focus while yesterday's low around 1.9955 is key support on the day. A break below this level would end a seven day sequence of higher daily lows and suggest the upside momentum is waning. No UK data scheduled today.
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