/GBP/USD rises above mid-1.35s, erases majority of daily losses | by Author: Eren Sengezer | FXStreet

GBP/USD rises above mid-1.35s, erases majority of daily losses | by Author: Eren Sengezer | FXStreet

DXY struggles to extend gains above 92. David Davis remains as the Brexit Secretary. EUR/GBP’s sharp drop helps GBP/USD gain traction. After dropping to a fresh five-day low at 1.3523 during the European session, the GBP/USD started to retrace its losses. As of writing, the pair was trading at 1.3565, down only 8 pips, or 0.06%, on the day. Earlier today, British Prime Minister Theresa May has kicked off the new year’s cabinet reshuffle and announced that she appointed David Lidington, the pro-European justice secretary, as the Minister for the Cabinet Office. Although the GBP had a hard time finding demand as investors awaited the political developments from the U.K., it started to gather strength as the critical positions in May’s party remained unchanged. “Downing Street confirmed Philip Hammond, chancellor, Amber Rudd, home secretary, and David Davis, Brexit secretary, would stay in their posts, amid signs the reshuffle would not see moves for Mrs. May’s most senior ministers,” the Financial Times recently reported. On the other hand, the US Dollar Index started the new week on a positive note and rose above the 92 mark for the first time since late December. At the moment, the index is up 0.3% at 92.03. Despite the greenback strength, however, the GBP/USD pair received an additional boost from the sharp 60-pip drop witnessed in the EUR/GBP pair.  Technical outlook The pair could encounter the first resistance at 1.3600 (psychological level), 1.3630 (Sep. 20 high) and 1.3700 (psychological level). On the downside, supports could be seen at 1.3520 (daily low), 1.3445 (20-DMA) and 1.3320 (100-DMA). The RSI indicator on the daily chart remains above the 50 mark, suggesting that buyers are still in control of the price action.