GBP/USD upside capped by 1.2500 ahead of BoE

The Sterling is down smalls at the end of the Asian session on Wednesday, with the upside in GBP/USD so far limited by 1.2500 the figure.

GBP/USD looks to BoE, OPEC

The ongoing recovery of the greenback put the recent upside in spot under the test during overnight trade, prompting it to come down after briefly testing the resistance area of 1.2530 during the European evening on Tuesday.

GBP will remain in centre stage today as the Bank of England will publish its Financial Stability Report later in the morning, wile the OPEC meeting remains poised to drive the sentiment around the risk-associated assets throughout the session.

Data wise across the pond, the ADP report could give markets a taste of what to expect on Friday’s Payrolls, followed by Personal Income/Spending, inflation figures tracked by the PCE, the Chicago Fed PMI and Pending Home Sales, all preceding the Fed’s Beige Book. In addition, FOMC’s J.Powell (permanent voter, neutral) and Cleveland Fed L.Mester (voter, hawkish) are due to speak.

Furthermore, it is worth recalling that GBP speculative net shorts have dropped to the lowest level since mid-September and Open Interest dropped to 4-week lows during the week ended on November 22, as shown by the latest CFTC report, reflecting the somewhat better tone seen in GBP in past weeks.

GBP/USD levels to consider

As of writing the pair is losing 0.10% at 1.2481 facing the next support at 1.2308 (low Nov.21) followed by 1.2297 (low Nov.18) and finally 1.2081 (low Oct.25). On the flip side, a breakout of 1.2527 (high Nov.29) would expose 1.2533 (high Nov.28) and then 1.2675 (high Nov.11).