GBP/USD tracks Oil higher, 1.3400 back on sight?

Having witnessed steep losses a day before in reaction to the mixed UK industrial output data and dovish remarks from BOE Chief Carney, the GBP/USD pair is on a gradual recovery path this Thursday.

GBP/USD regains 5-DMA at 1.3347

Currently, GBP/USD advances +0.15% to 1.3360, flirting with session highs printed at 1.3365 some minutes ago. The recovery in the GBP/USD pair gains traction as demand for the higher-yielding currency GBP picks-up pace amid rallying oil prices, which lifts the overall market sentiment.

While a fresh bout of buying interest seen in GBP/USD can be also attributed to an extended sell-off witnessed in the US dollar against its major rivals, with the USD index now dropping -0.23% to hover near session troughs of 94.69.

In the session ahead, all eyes remain on the ECB policy decision, which is likely to have major impact on the EUR/USD pair as well as a ‘rub-off’ effect on the cable.

GBP/USD Levels to consider                           

The pair has an immediate resistance at 1.3400 (daily high), above which 1.3341/47 (Sept 7 & 6 high) would be tested. On the flip side, support is seen at 1.3329 (daily low) below that at 1.3292 (Sept 6 low).