GBP/USD drops on Fed rate hike news

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Dec 16, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Mumbai) - The bid tone on the USD improved following a 25bps rate hike announcement after the US Fed, pushing the GBP/USD to a fresh daily low of 1.4957.

    Back near 1.4980

    The pair made its way back to trade near 1.4980 handle as the rate hike was largely in line with the estimates. The Fed statement also said the future rate hikes will be gradual, which means the next rate hikes will be data dependent.

    The traders now await the comments from the Fed chairwoman Yellen. In the meantime, the two –year treasury yield; currently at 1%; could guide the GBP/USD pair.

    GBP/USD Technical Levels

    The immediate support is seen at 1.4940 (falling channel support on the daily chart), under which the pair could test 1.4895 (Dec 2 low). A break lower would expose 1.4803 (Apr 7 low) . On the other hand, a break above the immediate resistance at 1.5053 (Nov 24 low), would open doors for a rally to1.5087 (61.8% of Apr-Jun rally). A break higher could see the pair test 1.5113 (23.6% of 1.5819-1.4895).
    For more information, read our latest forex news.

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