GBP/USD plummets to 1.4000 on USD strength

Cable down over a big figure since daily tops.
USD pick up behind the move.
U-Mich index coming in next.

Pablo Piovano FXStreet

The Sterling is now trading in the red figures and is forcing GBP/USD to retreat more than a cent to the current vicinity of the psychological support at 1.4000 the figure.

GBP/USD lower on USD-buying

Quite a moderate rebound in the greenback has motivated Cable to not only erase its daily gains but also to shed almost 150 pips since daily peaks in the 1.4140 region.

USD-bulls seem to have re-emerged around multi-year lows in the 88.30/20 band when tracked by the US Dollar Index (DXY), forcing the ongoing knee-jerk in the risk-associated space.

Furthermore, the upside in the buck stays bolstered by auspicious results from the US housing sector, where housing starts and building permits came in above expectations during January.

Later in the NA session, the advanced US consumer sentiment gauged by the Reuters/Michigan index will close the calendar for the week.

GBP/USD levels to consider

As of writing, the pair is losing 0.50% at 1.4046 and a breach of 1.4005 (low Feb.16) would aim for 1.3948 (10-day sma) and then 1.3765 (low Feb.9). On the upside, the next hurdle emerges at 1.4145 (high Feb.16) seconded by 1.4165 (near term resistance line) and finally 1.4280 (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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