The GBP is currently trading in the upper end of today’s range against the USD. The surge comes ahead of the CBI Distributive Trades Survey for May which is likely to see a drop of 0.7 percent according to analyst predictions.

Having suffered of late thanks to the emergence of GDP data which confirmed that the UK was in the midst of a double-dip recession and the lack of any hint of easing on the horizon from the BoE’s last monetary policy meeting, the euro zone woes have continued to act as the prevailing wind on the single currency. But Sterling has now begun to retrace some of its earlier losses, having hit a high of 1.2574 on live forex charts today and risk-on sentiment beginning to attract traders back into the UK fold.

The GBP continues to advance markedly against the greenback 0.11 percent at 1.5697, with the next hurdle waiting at 1.5735 followed by 1.5751 then 1.5850 and 1.5863. On the downside, a breach of 1.5630 would open the door to 1.5621 then 1.5603 and 1.5531.

Eyes on forex charts, say top analysts

Yesterday’s cable ceiling remains firmly in place for the time being, but traders are advised not to take their eyes off this pair for too long today. Speaking of what traders and brokers can expect from today’s cable action, analyst at CharmerCharts.com, Carol Harmer (pictured), said: "GBP/USD stochastics on both the 60 min and daily are now turning positive...so if we do get a pullback to the 1.5640/20 area we would anticipate buyers in at these lower levels...

“We would expect them to hold longs unless we lose 1.5605. We can trade higher from here with a break above 1.5720 leaving a foundation to build from and allowing the market to rise to 1.5770/80 initially. Cover longs to here."

The emergence of Greek polls data provided the GBP with a boost in Monday’s trading, with voter sentiment reportedly swaying towards the anti-bailout New Democracy party. Despite last week’s disappointing GDP data, which saw the UK’s Q1 GDP drop to -0.3%, its position in the global market is still greatly affected by the plight of the shared euro zone currency. “Sterling’s safe-haven status still looks likely to push it even higher”, said an emailed market analysis from Caxton FX.

Cable under pressure

But against the USD, investors are unlikely to enjoy the same safety. “Sterling is always going to be under pressure against the US dollar. It should benefit from a minor short-covering bounce soon, though a return anywhere close to $1.60 looks a stretch now”, the emailed report added. “Risk appetite away from the US dollar is likely to be hard-pushed to return in force ahead of the June 17th Greek elections.”

The relatively quiet week ahead is set to be dominated by the emergence of important US data on Thursday and Friday. The revised GDP estimate for the nation is due for release on Thursday and will shed light on the growth (or lack thereof) experienced in Q1 and is likely to have more impact on live forex charts than any other events this week.. Top market analysts and forex brokers currently expect the figure to be revised down from 2.2 percent to 1.9 percent; whatever the figure, it is widely thought that it will be a significantly lower than 2011’s Q4 reading of 3.0 percent.

Similarly, Friday will see the release of US nonfarm payrolls data, which is always considered a strong leading indicator for consumer spending.

Sarah Cox, Staff Writer