GBP/USD surges close to 3-week high, swings over 100-pips from session low

The GBP/USD pair tumbled to mid-1.3100s following the opening statements from the Fed Chair Janet Yellen, suggesting that the case of an eventual Fed rate-hike has increase in the recent month. 

The pair, however, recovered sharply to quickly erase all of its losses and surged over 100-pips from session low to currently trade around mid-1.3200s, within striking distance of 3-week high touched on Wednesday.

Market seemed unconvinced that the Fed would go ahead and raise interest-rate in the near-future with the CME group’s FedWatch tool pointing to only 18.0% probability of such an action in September, down from previous day’s probability around 21.0%.

Technical levels to watch

On a sustained strength above 1.3250 region, marking 50-day SMA, the pair seems all set to break through 1.3300 handle and head towards testing monthly high resistance near 1.3370 area, before eventually aiming towards its next major resistance near 1.3475-80 region in the near-term.

On the flip side, 1.3200 round figure mark now become immediate support to watch for, which if broke should now turn the pair vulnerable to break below session low support near 1.3150 region and retest 1.3100 round figure mark support.