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Daily Pivots: (S1) 1.2756; (P) 1.2817; (R1) 1.2885; More...

Intraday bias in GBP/USD remains neutral and outlook is unchanged. Price actions from 1.2661 are viewed as a consolidation pattern. Break of 1.2692 will bring retest of 1.2661 first. Firm break there will resume the larger down trend from 1.4376. On the upside, sustained break of 4 hour 55 EMA (now at 1.2917) could extend the consolidation with another rise. But even in case of strong rally, upside should be limited by 1.3316 fibonacci level to bring down trend resumption eventually.

In the bigger picture, whole medium term rebound from 1.1946 (2016 low) should have completed at 1.4376 already, after rejection from 55 month EMA. The structure and momentum of the fall from 1.4376 argues that it's resuming long term down trend. And this will be the preferred case as long as 38.2% retracement of 1.4376 to 1.2661 at 1.3316 holds. However, firm break of 1.3316 would bring stronger rebound to 61.8% retracement at 1.3721. And, the eventual depth of the fall from 1.4376, and the chance of hitting 1.1946 low, will depend on the strength of the interim corrective rebound from 1.2661.

Daily Pivots: (S1) 0.9965; (P) 1.0026; (R1) 1.0062; More...

At this point, USD/CHF remains bounded in range of 0.9952/1.0128. Intraday bias remains neutral first. Also, near term outlook stays bullish with 0.9952 support intact and further rally is in favor. On the upside, above 1.0128 will resume the whole rise from 0.9186 and target 1.0342 key resistance next. However, firm break of 0.9952 will indicate short term topping and bring deeper fall back to 0.9848 support first.

In the bigger picture, the pullback from 1.0067 has completed at 0.9541 already. And rise from 0.9186 is likely resuming. Firm break of 1.0067 will pave the way to retest 1.0342 key resistance. We'd be cautious on strong resistance from there to limit upside to bring another medium term fall to extend long term range trading. However, break of 0.9848 near term support will dampen this view and bring deeper decline back to 0.9541 support and possibly below.

Investors across the globe have been looking for a U.S.-China breakthrough after U.S. President Trump said he thinks a deal with China will be made. His comments on Friday provided some support to the S&P 500 and Dow Jones Industrial Average which pared some of their weekly losses. However, the Tech sector remained under pressure, indicating that markets are not willing yet to jump into high multiple and growth stocks.

Such a fundamental shift in investor behavior suggests that the downside moves will be more exaggerated than the upside. This is when selling the rallies mindset dominates over buying the dips, and a repeat of October's selloff cannot be ruled out unless we see a meaningful shift in fundamentals.

U.S. Vice President Mike Pence didn't give the bulls what they wanted over the weekend. At the Asia- Pacific Economic Cooperation Summit, Pence said there would be no end to U.S. tariffs on Chinese goods until China changes its ways. His comments suggest that a deal between President Trump and President Xi is unlikely to see the light when the leaders meet at the G20 Summit later this month.

Given that we are near the end of the earnings season and the U.S. economic calendar has only tier 2 data to release, expect markets to trade on thin volumes. Political headlines will likely dominate, and thus expect volatility to remain high.

Such an environment should lend the Dollar some support, but if we start sensing more concerned voices towards the tightening cycle in monetary policy, the Dollar may also be dragged lower. New York Fed President John Williams is due to speak later today, and any signs of dovishness will likely put some pressure on the Greenback.

It's a big week for the U.K. and the Sterling as only a few days remain until the Brexit Special Summit scheduled to be held on November 25. The 1-month implied volatility for GBPUSD has climbed above 14 for the first time since the Brexit vote. This suggests that many investors have been very actively buying options to protect their portfolios against any shocks, which also indicates there will be steep moves in the next couple of days to come. GBPUSD may easily move 5% lower or higher depending on the outcome of Brexit.

GBP/USD failed to gain pace above 1.3060-70 and declined recently below the 1.2950 support. EUR/GBP traded higher recently and it is currently well supported above the 0.8820 level.

Important Takeaways for GBP/USD and EUR/GBP

• The British Pound declined below the 1.3000 and 1.2950 support levels.
• There is a crucial bearish trend line in place with resistance at 1.2960 on the hourly chart of GBP/USD.
• EUR/GBP is currently trading well above the key 0.8800 support area.
• There is a major bullish trend line formed with support at 0.8800 on the hourly chart.

GBP/USD Technical Analysis

The British Pound formed traded towards the 1.3200 resistance this past week against the US Dollar. The GBP/USD pair failed to break the 1.3200 resistance and later started a downside move.

The pair declined heavily and broke the 1.3120, 1.3000 and 1.2950 support levels. There was also a close below the key 1.2950 support and the 50 hourly simple moving average. The decline was such that sellers pushed the price below the 1.2800 level.

During the decline, there was a break below a bullish trend line with support at 1.2920 on the hourly chart. A new weekly low was formed at 1.2772 on FXOpen and later the pair started an upside correction.

The pair recovered above the 1.2800 resistance and the 23.6% Fib retracement level of the last decline from the 1.3070 high to 1.2772 low. However, the pair seems to be struggling near the 1.2880 level and the 50 hourly simple moving average.

Besides, there is a crucial bearish trend line in place with resistance at 1.2960 on the same chart. Before the trend line, the 1.2900 resistance is important along with the 50% Fib retracement level of the last decline from the 1.3070 high to 1.2772 low.

Therefore, if the pair continues to correct higher, it is likely to face a solid selling interest near the 1.2900 and 1.2920 resistance levels. On the downside, an initial support awaits at 1.2800, below which the pair could trade towards the 1.2750 level.

EUR/GBP Technical Analysis

The Euro formed a solid support near the 0.8660 level against the British Pound. The EUR/GBP pair started an upward move and traded above the 0.8700 and 0.8770 resistance levels.

The recent wave was bullish since the pair moved above the 0.8800 resistance and the 50 hourly simple moving average. The upward move was such that the pair tested the 0.8900 resistance level.

A high was formed at 0.8904 and later the pair started consolidating gains. An initial support is near 0.8860 and the 50% Fib retracement level of the last wave from the 0.8824 low to 0.8904 high.

However, the key support is near the 0.8840 level and the 50 hourly SMA since it coincides with a connecting bullish trend line on the hourly chart plus the 76.4% Fib retracement level of the last wave from the 0.8824 low to 0.8904 high.

More importantly, there is a major bullish trend line formed with support at 0.8800 on the same chart. Therefore, if the pair corrects lower from the current levels, it will most likely find a strong buying interest near the 0.8860 and 0.8840 levels. The main pivot zone is at 0.8800, below which the pair could move into a bearish zone.

On the upside, an initial resistance is at 0.8900, above which EUR/GBP could trade above the 0.8920 resistance for an extended move towards the 0.8950 level.

Daily Pivots: (S1) 112.41; (P) 113.04; (R1) 113.43; More..

Intraday bias in USD/JPY remains on the downside for the moment. Fall from 114.20 is seen as the third leg of the consolidation pattern from 114.54. Deeper fall would be seen to 111.37 support and possibly below. But downside should be contained by 38.2% retracement of 104.62 to 114.54 at 110.75 to bring rebound. On the upside, above 113.70 minor resistance will turn bias back to the upside for 114.54/73 key resistance zone.

In the bigger picture, corrective fall from 118.65 (2016 high) should have completed with three waves down to 104.62. Decisive break of 114.73 resistance will likely resume whole rally from 98.97 (2016 low) to 100% projection of 98.97 to 118.65 from 104.62 at 124.30, which is reasonably close to 125.85 (2015 high). This will stay as the preferred case as long as 109.76 support holds. However, decisive break of 109.76 will dampen this bullish view and turns outlook mixed again.

The forex markets are generally trading in tight range as the week starts. Yen, Dollar and Sterling are generally firmer. Australian Dollar and New Zealand Dollar are the weaker ones, together with Euro. But movements in the markets are very limited. Overall, the greenback stays relatively soft as markets started to pare back bets on Fed's hike path. Sterling stabilized as there was, up to Sunday, not enough requests to trigger a challenge on UK PM May yet. But it remains vulnerable of more political shocks from the UK. And Euro is rather cautiously watching the drama of Italy-EU budget showdown.

Technically, while the greenback has been weak since last week, there is no clear sign of reversal yet, except versus Yen and Aussie. EUR/USD is held below 1.1499 resistance, USD/CHF above 0.9952 support. USD/CAD is also holding well above 1.3056 support. USD/JPY's break of 112.94 last week argues that recent consolidation from 114.54 is extending with another falling leg towards 111.37. But there is no medium term reversal yet. The bigger development was AUD/USD's break of 0.7314 structural resistance. Sustained trading above there will indicate medium term reversal.

In other markets, Nikkei closed up 0.65% at 21821.16. Hong Kong HSI and China Shanghai SSE are up 0.32% and 0.60% respectively. But Singapore Strait Times is down -0.66%. Japan 10 year JGB yield id down -0.013 at 0.094, back under 0.10%! Gold is hovering in tight range below 1220. WTI crude oil is consolidation at around 57.3.

UK Brady predicts PM May to win leadership challenge, but 48 threshold not even met yet

As confirmed by Graham Brady, chair of the 1922 Committee, the number of requests for no-confidence vote on Prime Minister Theresa May haven't met the threshold of 48 yet. He added, "if a threshold were to be reached I would have to consult with the leader of the party the Prime Minister."  And he expected the "whole thing" to be an "expeditious process", if it happens.

Also, Brady predicted even if there is a leadership China, May is going to win it. He said "it would be a simple majority, it would be very likely that the Prime Minister would win such a vote and if she did then there would be a 12-month period where this could not happen again, which would be a huge relief for me because people would have to stop asking me questions about numbers of letters for at least 12 months."

However, Brady is also dissatisfied with the May's Brexit deal and branded it as "tricky". He predicted that "it certainly doesn't look like the current agreement will get through [the Commons} unless either the agreement changes or the statement of the political declaration, the future relationship, gives considerably stronger grounds for optimism a bout the nature of the final deal."

UK May: Change of leadership risk delaying Brexit negotiations

UK Prime Minister Theresa May warned yesterday that "a change of leadership at this point isn't going to make the negotiations any easier". Instead she added "what it will do is mean that there is a risk that actually we delay the negotiations and that is a risk that Brexit gets delayed or frustrated." May also emphasized that "these next seven days are going to be critical, they are about the future of this country". And she pledged not to be "distracted from the important job."

May is also expected to reiterate the same message in a speech to the CBI's annual conference today. According to advance extracts, May would say "We now have an intense week of negotiations ahead of us in the run-up to the special European Council on Sunday (Nov 25)." And, "during that time I expect us to hammer out the full and final details of the framework that will underpin our future relationship and I am confident that we can strike a deal at the council that I can take back to the House of Commons."

ECB Villeroy de Galhau: No rush to set out length of reinvestment period after asset purchases end

ECB Governor Council member Francois Villeroy de Galhau said today that net asset purchase will "very probably end in December" as planned. However, he emphasized that "the end of our net asset purchases will not, however, mean the end of our monetary stimulus, far from it."

The pace of normalization would depend on incoming economic data. And three tools are at ECB's disposal, including reinvestment of assets, interest rate and refinancing operations. Villeroy would prefer slowing the rate of reinvestment only after the first interest rate hike, which wouldn't happen at least through the summer of 2019.

He also added that "we are not obliged to rush, as early as at our December meeting, to set out the precise length of our reinvestment period."

SNB Maechler: Negative interest rate remains indispensable for Switzerland

Swiss National Bank Governing Board member Andrea Maechler said in newspaper Le Matin Dimanche interview that current monetary policy remains appropriate. She noted the fragility in the financial markets, with risks surrounding Brexit, Italy and trade war. Also, the exchange rate of the Swiss Franc remained high.

Therefore, Maechler said, "In the current context, the negative interest rate remains indispensable for Switzerland. It enables us to restore, at least partially, a difference between Swiss interest rates and those abroad, thus reducing the franc's attractiveness."

Also, "our monetary policy based on the negative interest rate and our capacity to intervene on the currency market if needed is appropriate."

BoJ Kuroda: Mindful of banks' engagement in excessive risk taking

BoJ Governor Haruhiko Kuroda noted in a speech that amid a persistent low interest rate environment, "possible changes in the risk appetite and risk profile of banks ... is an issue" that BOJ is "highly attentive to". And, in the short term, "as downward pressure on banks' profits continues, we need to be mindful of the possible consequences of banks' engagement in excessive risk taking."

For banks with "abundant capital bases", risk taking "provides financial support to firms' production activities, thereby contributing to economic expansion". However, without appropriate risk management measures, continued decline in profits would lead to to "insufficient capital bases", and sharply higher credit costs. The stability of the financial system "could be threatened" in the event of a "large exogenous shock". Based on October's Financial System Report, the system has been maintaining stability on the whole.

On monetary, Kuroda repeated the same rhetoric that BoJ will continue with the current loose monetary policy. And, he's confident that BoJ inflation will eventually move back to target.

On the data front

New Zealand PPI input rose 1.4% qoq in Q3, above expectation of 0.8% qoq. PPI output rose 1.5% qoq, above expectation of 0.9% qoq. Japan trade deficit widened slightly to JPY -0.30T in October. UK Rightmove house prices dropped -1.7% mom in November. Eurozone will release current account. US will release NAHB housing index.

Looking ahead

UK politics, Brexit negotiation, Italy-EU budget showdown, US-China trade negotiations, Fed rhetorics will be the focuses of the week. Also, RBA and ECB will release meeting minutes. In addition, US durables goods orders, Eurozone PMIs and Canada CPI and retail sales are of particular importance. Here are some highlights for the week:

• Monday: New Zealand PPI; Japan trade balance; Eurozone current account, US NAHB housing index
• Tuesday: RBA minutes; Swiss trade balance; German PPI; US housing starts and building permits
• Wednesday: Japan all industries index; UK public sector net borrowing; Canada wholesale sales; US durable goods orders, jobless claims, leading indicator, existing home sales
• Thursday: ECB meeting accounts; Eurozone consumer confidence
• Friday: Japan PMI manufacturing; German GDP final; Eurozone PMIs; Canada CPI, retail sales; US PMIs

USD/JPY Daily Outlook

Daily Pivots: (S1) 112.41; (P) 113.04; (R1) 113.43; More..

Intraday bias in USD/JPY remains on the downside for the moment. Fall from 114.20 is seen as the third leg of the consolidation pattern from 114.54. Deeper fall would be seen to 111.37 support and possibly below. But downside should be contained by 38.2% retracement of 104.62 to 114.54 at 110.75 to bring rebound. On the upside, above 113.70 minor resistance will turn bias back to the upside for 114.54/73 key resistance zone.

In the bigger picture, corrective fall from 118.65 (2016 high) should have completed with three waves down to 104.62. Decisive break of 114.73 resistance will likely resume whole rally from 98.97 (2016 low) to 100% projection of 98.97 to 118.65 from 104.62 at 124.30, which is reasonably close to 125.85 (2015 high). This will stay as the preferred case as long as 109.76 support holds. However, decisive break of 109.76 will dampen this bullish view and turns outlook mixed again.

Economic Indicators Update

General Trend:

• Asian equity markets trade mixed
• Shanghai Property index rises over 1%, adds to Friday’s gain
• Australian markets weighed down by banks
• Financials decline in Japan while tech names gain ; Softbank rises over 4.5%
• Little reaction from USD/JPY on BOJ Gov Kuroda comments on bank profitability; banking names weaker
• Japan Display declines over 7%, broker issued cautious commentary
• Australia’s Stanmore Coal rises over 17%, received takeover offer
• Japanese insurers plan to invest in the US property market (Japanese press)
• Hong Kong and Thailand report weaker than expected Q3 growth
• APCA summit fails to reach joint communique for the first time in its history due to sparring giants, China and US
• Various HK property developers announce plans to tap the USD bond market
• China Oct bond issuance declines m/m (Xinhua)
• Press highlights US TIC flows, nothing that china has reduced its US Treasury holdings by the most in 8-months
• US Fed Fund Futures are implying lower probability of Dec 2018 rate hike vs last week; Fed’s Harker (non-voter) spoke on Friday
• No confidence vote for UK PM May said to be just 6 votes shy of the required 48 needed
• EU Brexit Chief Negotiator Barnier has floated the idea of extending Brexit transition by 2 years to end of 2022
• Reserve Bank of Australia (RBA) due to release its monetary policy meeting minutes on Tuesday

Headlines/Economic Data

Japan

• Nikkei 225 opened flat
• (JP) Japan Oct Trade Balance: -¥449.3B v -¥70Be; Adj Trade Balance: -¥302.7B v -¥48.3Be; Exports to US +11.6%; China 9%; Asia +7.3%; EU +7.7%
• (JP) Bank of Japan (BoJ) Gov Kuroda: Possible changes in risk appetite and risk profile of banks amid low-interest rate environment is an issue central banks are highly attentive too
• (JP) Japan PM Abe: To order a 2nd extra budget after returning to Japan (Friday)

Korea

• Kospi opened +0.2%
• (KR) South Korea affiliates and subsidiaries of South Korea’s top 30 conglomerates spent combined KRW64.9T on acquiring business assets, +10.9% y/y - Korean press
• (KR) Bank of Korea (BoK): Any rapid bond capital outflow may incite market unrest
• (KR) North Korea might have tested a new long-range artillery - financial press (Friday)
• (KR) South Koreans owning more than 2 houses increases 140K in a year, those owning 5 or more homes now tops 110K according to Statistics Korea
• (KR) South Korea sells KRW310B 6-month Monetary Stabilization Bonds (MBSs) at 1.790%
• (KR) North Korea press DPRK: US has forgotten the objectives agreed upon during the Singapore summit; maximum pressure tactic is medieval and will not work - Yonhap

China/Hong Kong

• Hang Seng opened +0.4%, Shanghai Composite +0.1%
• (CN) China former trade min Long Yongtu: targeting US soybeans from the start was a ‘political’ decision that was not properly thought through – SCMP
• (CN) Asia-Pacific Economic Cooperation summit ended without agreement on a joint communique for the first time in its history; escalating tensions between the United States and China dominated proceedings
• (CN) Former PBoC Gov Zhou said officials must fully assess the impact that fintech might have on monetary policy and financial stability - HK Press
• (HK) Property developers in Hong Kong said to have low sales volumes for certain new projects - HK Press
• (CN) South China Morning Post comments on China's recent trade offer to the US: The offer said to include additional purchases of US natural gas, along with improved intellectual property rights protection
• iPhone glass supplier Biel Crystal postpones $1.5B Hong Kong IPO plan, due to current downbeat market conditions – SCMP
• (CN) Negotiators for China and the US have rescheduled talks for G20 Buenos Aires instead of Washington after work level talks between the two sides – SCMP
• (CN) China PBoC Open Market Operation (OMO): v skipped prior (17th straight skip)
• (CN) China PBoC sets yuan reference rate: 6.9245 v 6.9377 prior
• (CN) China Banking and Insurance Regulator (CBIRC) Vice Chairman Zhou: Reiterates financial institutions must support small and private companies; risk in domestic credit market has reduced

Australia/New Zealand

• ASX 200 opened flat
• (NZ) New Zealand Q3 PPI Input q/q: 1.4% v 1.0% prior; PPI Output q/q: 1.5% v 0.9% prior
• (AU) Australia sells A$1.0B v A$1.0B indicated in April 2029 bonds, avg yield 2.6596%, bid to cover 2.56x
• (AU) China Commerce Ministry (MOFCOM): Begins anti-dumping probe related barley from Australia
• Medibank, [-6%], MPL.AU Was not selected as preferred tenderer for Garrison Health contract, worth ~A$5M in H2
• Stanmore coal, [+17%], SMR.AU Golden Investments, Ascend Global Investment Fund SPC and Resources Limited to jointly acquire Stanmore for A$0.95/shr in an off market takeover’ Guides FY19

Other Asia

• (TH) Thailand Q3 GDP q/q: 0.0% v 0.6%e; y/y: 3.3% v 4.2%e (slowest growth since early 2017)
• (TH) Thailand Planning Agency Revises forecast after weaker than expected Q3 GDP data: Sees 2018 GDP growth 4.2% v 4.2-4.7% projected in Aug

North America

• CBS Board could announce merger with Viacom within the next 3-6 months - NY Post
• (US) Fed-Fund Futures are implying a 65% probability of 25bps rate hike in Dec 2018 vs 69% on Friday - US financial press

Europe

• (UK) PM May Monday speech excerpts: Have an intense week of negotiations ahead of us, expect to hammer out full and final details of future relationship framework this week
• (UK) Former Brexit Min Raab: PM May's plan is fatally flawed, but can be saved; EU is bullying UK, its nearly blackmail - financial press
• (UK) PM May: Getting rid of me would risk delaying Brexit, not make talks easier; a delay could also see people try to stop it from happening; as far as I know there is not enough support for a no confidence vote – press
• (UK) 42 Tory MPs submit letters of assurance to not support PM May; 25 have publicly said they have sent no confidence letters and 17 privately; leaves 6 votes shy of triggering a no confidence vote - UK press
• (UK) EU Brexit Chief Negotiator Barnier has floated the idea of extending Brexit transition by 2 years - UK Press
• (UK) Nov Rightmove House Prices m/m: -1.7% v +1.0% prior; y/y: -0.2% v +0.9% prior
• (FR) ECB’s Villeroy (France): Asset purchases probably to end in Dec; outlook for Euro area inflation is firmer

Levels as of 12:50ET

• Hang Seng 0.0%; Shanghai Composite +0.5%; Kospi +0.2%; Nikkei225 +0.5%; ASX 200 -0.6%
• Equity Futures: S&P500 -0.4%; Nasdaq100 -0.3%, Dax -0.3%; FTSE100 -0.4%
• EUR 1.1396-1.1421; JPY 112.61-112.85 ; AUD 0.7303-0.7326;NZD 0.6843-0.6874
• Dec Gold -0.3% at $1,219/oz; Jan Crude Oil +1.0% at $57.20/brl; Dec Copper -0.9% at $2.77/lb

Key Highlights

The Euro recovered recently and traded above the 1.1350 resistance against the US Dollar.

There is a key connecting bearish trend line in place with resistance at 1.1460 on the 4-hours chart of EUR/USD.

EURUSD Technical Analysis

Looking at the 4-hours chart, the pair gained traction above the 1.1320 resistance and the 50% Fib retracement level of the last decline from the 1.1500 swing high to 1.1215 low.

More importantly, the pair settled above the 1.1350 resistance and the 100 simple moving average (red, 4-hours). However, the pair is now approaching a solid resistance near the 1.1460 level, which was a support earlier and now it could stop the current upward move.

Moreover, there is a key connecting bearish trend line in place with resistance at 1.1460 on the same chart. The same trend line is positioned along with the 200 simple moving average (green, 4-hours).

Finally, the 76.4% Fib retracement level of the last decline from the 1.1500 swing high to 1.1215 low is around the 1.1440 level. Therefore, the 1.1460 resistance zone is very crucial. A successful break above the trend line, 200 SMA, and the 1.1460 resistance will most likely clear the path for more gains in the near term.

Alternatively, if the pair fails to settle above the 1.1460 resistance, it could start a fresh decline. An initial support is near the 1.1350 level and the 100 SMA. Besides, there is a major bullish trend line in place with support at 1.1350.

For the 24 hours to 23:00 GMT, the EUR rose 0.75% against the USD and closed at 1.1409 on Friday

In economic news, the Euro-zone's final consumer price index climbed to a six-year high level of 2.2% on a yearly basis in October, meeting market expectations and compared to a gain of 2.1% in the prior month. The preliminary figures had indicated a rise to 2.1%.

The European Central Bank (ECB) President, Mario Draghi stated that the Eurozone's economy has slowed in recent months, however, he sees “no reason” for the economy to stop expanding. Further, he expects the current expansion to remain “resilient” and inflation to not rise as quickly as earlier expected. Draghi reiterated that the central bank would stick to its plan to end its stimulus program at the end of this year. Further, he warned that uncertainties around the medium-term outlook have increased significantly.

The US dollar fell against a basket of currencies, as the Federal Reserve's policymakers expressed concerns over the global economic slowdown and made cautious comments on the outlook for interest rate hikes.

In the US, data showed that US manufacturing production rose 0.3% on a monthly basis in October, more than market expectations for a rise of 0.2%. In the previous month, manufacturing production had registered a similar revised rise. Meanwhile, the nation's industrial production advanced 0.1% on a monthly basis in October, undershooting market consensus for a rise of 0.2%. Industrial production had recorded a revised increase of 0.2% in the preceding month.

In the Asian session, at GMT0400, the pair is trading at 1.1405, with the EUR trading a tad lower against the USD from Friday's close.

The pair is expected to find support at 1.1344, and a fall through could take it to the next support level of 1.1284. The pair is expected to find its first resistance at 1.1443, and a rise through could take it to the next resistance level of 1.1482.

Looking forward, traders would keep an eye on the Euro zone's construction output for September, set to release in a few hours. Later in the day, the US NAHB housing market index for November, will garner significant amount of investors' attention.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

For the 24 hours to 23:00 GMT, the GBP rose 0.47% against the USD and closed at 1.2827.

In the Asian session, at GMT0400, the pair is trading at 1.2833, with the GBP trading 0.05% higher against the USD from yesterday's close.

On the data front, UK's Rightmove house price index retreated 1.7% on a monthly basis in November, following an advance of 1.0% in the preceding month.

The pair is expected to find support at 1.2781, and a fall through could take it to the next support level of 1.2728. The pair is expected to find its first resistance at 1.2882, and a rise through could take it to the next resistance level of 1.2930.

The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.