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GBP/USD: cross driven rally running out of steam

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 29, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Mumbai) - The GBP/USD pair strengthened in Asia and extended gains to 1.4413 largely on the back of a sharp rally in the GBP/JPY cross, which ran out of steam in Europe.

    Cable eyes 23.6% fib support

    From the current level of 1.4370, the pair is eyeing the support at 1.4351 (23.6% of 1.5230-1.4079). The negative rate surprise form the BOJ saw the GBP/JPY cross strengthen more than 200-pips to 174.17 before a bout of profit taking pushed it back to 173.50.

    Consequently, the GBP/USD pair turned lower from the high of 1.4413 to trade around 1.4370 levels. The spot remains at the mercy of the action in the GBP/JPY cross and European equities ahead of the US GDP release.

    GBP/USD Technical Levels

    The immediate support is seen at 1.4351 (23.6% of 1.5230-1.4079), under which the spot could drop to 1.4290. A break lower would expose 10-DMA at 1.4262. On the other hand, a break above 1.4413 (daily high) would open doors for a rally to 1.45 levels, which if taken out may see the pair test offers at 1.4538 (weekly 5-MA).
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