GBP/USD bounces off lows, around 1.3740

• Cable remains within the negative territory on Monday.
• The area area 1.3720 offered decent support for now.
• US Core PCE rose in line with expectations 1.9% YoY.

The selling pressure around the Sterling remains intact at the beginning of the week, with GBP/USD adding to last week’s losses in the 1.3740/20 band.

GBP/USD support emerged near 1.3720

Cable is extending the leg lower after clinching fresh post-Brexit tops in the 1.4380 area earlier in the month, closing in the red territory in just one out the last ten sessions and already shedding around 4.7% since those levels.

The dovish message from the BoE at its last meeting coupled with the heavy tone from Governor Carney’s last speeches have poured frozen water over expectations of a rate hike by the ‘Old Lady’ at the May meeting and thus sparked a wave of selling orders around GBP. From being a ‘done deal’, the probability of a 25 bp rate hike next month is now at around 25%.

Cable kept today’s rebound unchanged from lows intact after US Core PCE matched initial forecasts, rising at an annualized 1.9% and 0.2% inter0-month. In addition, Personal Income expanded 0.3% MoM in March and Personal Spending rose at a monthly 0.4%.

Later in the session, the Chicago PMI and March’s Pending Home Sales are also due.

GBP/USD levels to consider

As of writing, the pair is down 0.25% at 1.3746 and a break below 1.3713 (low Apr.30) would aim for 1.3712 (low Mar.1) and then 1.3658 (2017 high Sep.20). On the upside, the next hurdle emerges at 1.3874 (100-day sma) seconded by 1.3965 (low Apr.5) and finally 1.3988 (10-day sma).