The GBP/USD opened in Asia around 2.0155 after being the best performing major currency during the Lon/NY sessions. The GBP/USD traded in a very narrow 2.0146/2.0161 range in Asia, but the GBP gained ground against the EUR with the EUR/GBP easing from 0.6760 to 0.6755.
The firm tone of the GBP was in part attributed to the strong BRC Retail Sales data that showed June like- for-like Retail Sales up 3% Y/Y. Traders also say that the JPY buying, which was the main theme in Asia today, was mostly against the EUR and NZD with the GBP/JPY seeing only light selling flows.
Sentiment towards the GBP/USD remains bullish, but the repeated fails above 2.0200 last week is tempering sentiment as we approach the higher levels. The GBP is getting broad support from the view that the BOE will have to hike again in the months to come.
Hourly support has formed around 2.0135 and only a fall below that level would relieve the upward pressure. UK trades are out later today, but the Bernanke speech on inflation should be the main event for the FX markets.
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