GBP/USD under pressure near 1.3020 on Carney

Cable fades the earlier spike beyond the 1.3100 handle.
The pair comes under further pressure on dovish Carney.
The BoE raised rates by 25 bp to 0.75% at today’s meeting.

Pablo Piovano FXStreet

After moving above 1.3100 the figure in the wake of the BoE’s interest rate hike, GBP/USD has now come under further selling pressure and probes lows around 1.3020.

GBP/USD weaker on Carney

The Sterling has gathered extra downside pressure after Governor M.Carney said the equilibrium interest rate is expected to raise gradually.

Carney also noted that Brexit is weighing on business investments, adding that risk premia on GBP assets have increased somewhat. Still on Brexit, Carney said negotiations are entering a critical period, while limited and gradual tightening of monetary policy is likely to be needed.

Governor Carney also added that Q1 slowdown was primarily due to weather rather than economic conditions.

GBP/USD levels to consider

As of writing, the pair is losing 0.79% at 1.3023 and a break below 1.3000 (psychological level) would open the door to 1.2957 (2018 low Jul.19) and finally 1.2771 (monthly low Aug.4 2018). On the flip side, the next hurdle lines up at 1.3162 (21-day sma) followed by 1.3215 (high Jul.28) and then 1.3245 (55-day sma).

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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