GBP/USD buyers appeared near 1.2350

Pablo Piovano FXStreet

The decline in GBP/USD seems to have found some decent support in the mid-1.2300s for the time being.

GBP/USD weaker on USD-buying

The increasing selling pressure around the Sterling has relegated spot to the 1.2350 region earlier in the European morning, levels last seen in late January.

In the meantime, the correction higher in the greenback stays well and sound so far, albeit the US Dollar Index has eased a tad from daily peaks.

GBP lost some upside feeling after the Bank of England stressed it is not in a rush to hike rates, and that the future move in rates could be in either direction. The BoE’s stance removed some tailwinds from the Sterling, which has been recently propped up by alleviated concerns of a ‘hard Brexit’ scenario, particularly following the last speech by PM Theresa May and the Supreme Court ruling.

Speculative positioning is also supporting GBP, as the latest CFTC report showed net shorts have decreased to 5-week lows during the week ended on January 31.

Data wise in the UK, house prices tracked by Halifax contracted 0.9% MoM in January and expanded 5.7% over the last twelve months, both results missing prior surveys.

GBP/USD levels to consider

As of writing the pair is losing 0.81% at 1.2368 facing the next support at 1.2348 (low Feb.7) followed by 1. 2250 (low Jan.19) and finally 1.2036 (low Jan.11). On the upside, a breakout of 1.2487 (high Feb.7) would aim for 1.2510 (high Feb.6) and then 1.2715 (high Feb.2).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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