GBP/USD extends drop towards 1.4500, UK data eyed

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 12, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Mumbai) - Having peaked just ahead of 1.46 handle in the last US session, the GBP/USD pair continues to push lower and resumes its recent downtrend amid a mixed US dollar.

    GBP/USD trades below all major DMAs

    The GBP/USD pair trades -0.17% lower at fresh session lows of 1.4519, and looks for a test of 1.45 handle. The cable came under renewed selling pressure, after the oil prices continued to tumble and were smashed to fresh twelve-year lows. Both crude benchmarks are down -2%.

    The risk-off trades have once again resurfaced with the Chinese stocks paring back gains, and therefore, diminishing the bids for riskier currencies such as the GBP. Moreover, markets remain cautious ahead of the industrial figures from the UK, which are expected to show a rebound in the manufacturing outputs, while the total industrial production is expected to have eased in Nov.

    More so, the comments from BOE Governor Carney on the monetary policy will be closely heard, as he will participate in a panel discussion titled "Legacy for Business Models and Financial Stability" in Paris.

    GBP/USD Levels to consider

    The pair has an immediate resistance at 1.4588/ 4600 (1h 100-SMA/ round number), above which 1.4623 (10-DMA) would be tested. On the flip side, support is seen at 1.4500/1.4491 (round number/ Jan 11 low) below which it could extend losses to 1.4480 (June 2010 levels).
    For more information, read our latest forex news.

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