The downside correction in GBP/USD pair gathers steam after a brief phase of consolidation around 1.2270in early dealings, now pushing the rate below the mid-point of 1.22 handle.
The spot ran into resistances lined up just below 1.23 handle, and resumed its corrective slide amid broad based US dollar recovery, after the steep sell-off triggered by a less-hawkish Fed decision, which dashed hopes of acceleration in the pace of monetary policy tightening by the Fed.
Moreover, a solid rebound staged by treasury yields curbs demand for the GBP as an alternative higher-yielding currency and hence, collaborates to the renewed downside in the major.
However, a risk-on rally in the European equities may help cushion the losses in GBP/USD, as all eyes remain focused on the upcoming BOE policy decision, with most analysts expecting the British central bank to maintain a status-quo today.
GBP/USD Levels to consider
Karen Jones, Analyst at Commerzbank notes, “GBP/USD near term outlook is neutralizing: Sterling failed to close below the 78.6% retracement at 1.2142, for 6 days and has reversed near term. It has based near term and is likely to re test the 55 and 100 day ma at 1.2374/1.2407. Above here initial resistance is 1.2583 (9th Feb high). However only above 1.2658 channel would allow for further strength to the 1.2776 December high. Between here and 1.2836 lies several Fibonacci retracements and major resistance and we suspect that it will fail here.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.