GBP/USD analysis: long live the king… dollar

Valeria Bednarik FXStreet

GBP/USD Current price: 1.2174

The GBP/USD pair plunged early US morning to its lowest level in over three weeks, printing 1.2082 before recovering roughly 100 pips ahead of Carney's speech. The pair has traded within a very limited range ever since the week started, and there was no catalyst behind the sudden 150 pips decline beyond dollar's strength. Disappointing US data however, helped the pair to recover part of the ground lost. BOE's Governor Carney testified about the economic consequences of the Brexit Vote before the House of Lords Economic Affairs Committee, in London, and said that inflation could pick up to between 1.5 or 1.8% in the first half of 2017, hinting that the bank may become to worry, should inflation move pass the 2% annual target. He also added that they will take into account Pound's weakness in their next meeting, helping the pair to bounce. Technically, the risk remains towards the downside, given that the price is settling below the 1.2200 level, and the 4 hours chart shows that the 20 SMA is turning south above the current level, while technical indicators have bounced alongside with the price, but remain within bearish territory.

Support levels: 1.2130 1.2090 1.2050

Resistance levels: 1.2220 1.2250 1.2290

View Live Chart for the GBP/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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