GBP/USD: on the front foot, eyes 38.2% Fibo level

GBP/USD strengthened in Asia and is maintaining its bid tone in early Europe with eyes set on 1.4154 (38.2% of 1.4669-1.3835).

Focus on GBP/JPY amid Brexit fears

The UK economic calendar is empty, thus the pair is at the mercy of the action in the GBP/JPY cross. Yen bears have little reason to make their presence felt as anti intervention lobby at BOJ and Japanese government continues to strengthen. Nevertheless, technical factors may come into play and trigger a correction in GBP/JPY cross and lend support to Cable.

Volatility is likely to stay high as investors consider the possibility of Brexit and its impact on the UK economy. Later in the day comments from US Treasury secretary Jack Lew and Fed’s William Dudley may influence the pair.

GBP/USD Technical Levels

The immediate hurdle is noted at 1.4154 (38.2% of 1.4669-1.3835), above which prices could rise to 1.4219 (10-DMA). A break higher could yield rally to 1.4258 (50-DMA). Conversely, violation at immediate support of 1.4419 (5-DMA) would expose 1.4079 (Jan 21 low). Next major support is seen at 1.4032 (23.6% of 1.4669-1.3835).