GBP/USD eases back above 1.3550 amid quiet MLK holiday markets
GBP/USD has seen a gradual recovery from early European morning session lows at 1.3520 and now trades comfortably back above the 1.3550 level, though is still down by around 0.1% or around 10 pips. Volumes have dropped off significantly in recent trade and will continue to do so into the evening given the absence of US market participants, who are away for Martin Luthar King Junior Day. Things will pick up after 23:00GMT as market participants begin to return at the start of the Asia Session.
The pair has been primarily focused on the USD dynamics so far on Monday, with GBP/USD undulating in line with movements in the Dollar Index (DXY); just as GBP/USD is off 1.3520 lows, the DXY is off highs in the mid-90.90s and now trades close to 90.80.
GBP/USD analysis: Could go downwards
The GBP/USD exchange rate bounced off the resistance level at 1.3700 and dropped below 1.3550.
It is likely that some downside potential could prevail in the market, and the currency pair could test the weekly S1 at 1.3457. If the given support holds, the pair could reverse north.
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