Cable retreats from 21-month high as S&P 500 futures drop

GBP/USD recedes from session high to trade near 1.3730.
THe S&P 500 futures drop, drawing bids for the greenback.

GBP/USD has erased gains, with the US stock futures pointing to a weakening of risk sentiment.

The currency pair is currently trading mostly unchanged on the day near 1.3730, having printed a high of 1.3752 early Wednesday. That was the highest level since May 2018.

The pair has pulled back from 32-month highs, seemingly tracking the decline in the US stock futures. The S&P 500 futures, which were flat early today, are now down 0.30%, signaling renewed risk aversion and possibly drawing bids for the dollar.

However, GBP/USD’s immediate technical bias remains bullish, as the higher lows and higher highs setup on the daily chart is still intact. Acceptance under Tuesday’s low of 1.3609 would invalidate the higher lows setup and shift the attention to the 50-day Simple Moving Average (SMA), which restricted the downside two times in December. The 50-day SMA is currently located at 1.3483.

The pair jumped 0.43% on Tuesday, printing a higher low at 1.3690 as Biden administration’s plans to boost vaccine supplies and the International Monetary Fund’s upward revision of global growth forecasts boosted risk appetite and weighed over the anti-risk dollar.