GBP/USD: Support levels at 1.1850/1950 may hold over the next couple of weeks – ING

GBP/USD closed in negative territory on Thursday but managed to hold above 1.2000. Support levels at 1.1850/1950 are set to hold in the next few weeks, economists at ING report.

A good week for UK data

“Following Tuesday's strong PMI release, the UK outlook has received another boost today in the form of a big jump in GFK consumer confidence. This has now returned to levels not seen since last April.”

“Slightly better growth prospects, sticky inflation and some further monetary tightening are the story across the US, the Eurozone and the UK at the moment – suggesting bilateral FX rates do not need to move too much. 

“Three-month GBP/USD implied volatility has drifted under 10% and would tend to favour more modest moves in the spot. We think support levels at 1.1850/1950 may hold over the next couple of weeks.”