GBP/USD consolidates near weekly highs

GBP/USD consolidates near 1-week highs at the beginning of the American session, having moved only slightly away.

GBP/USD broke above the 10-day SMA and rose to 1.3186, helped by easing UK political uncertainty after Theresa May won the Tory party leadership on Monday, becoming next UK prime minister.

Cable however, has retreated somewhat, but the pullback was contained by the 1.3120 area. At time of writing, the pair is trading at 1.3150, recording a 1.21% gain on Tuesday and over 350 pips above its 31-year low of 1.2796 scored last week.

On Thursday, the Bank of England will decide on monetary policy for the first time after the Brexit vote, with some analysts expecting a rate cut after Governor Carney hinted at more easing last week.

GBP/USD levels to watch

In terms of technical levels, next resistances could be faced at 1.3200 (psychological level) and  1.3288 (Jul 5 high). On the other hand, supports are seen at 1.2970 (Jul 12 low), 1.2849 (Jul 11 low), 1.2796 (31-year low, Jul 6) and 1.2700 (psychological level).