GBP/USD making a steep recovery from 30yr support line

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 (Guatemala) - GBP/USD is currently trading at 1.4425 with a high of 1.4561 and a low of 1.4350.

    GBP/USD has taking a trip down to test below the 1.44 handle and has made a minor recovery on better risk sentiment. Brexit fears are weighing on the pound, but the referendum is still someway off and rather markets prefer to push the barriers and that is what we are seeing.

    GBP/USD lower on CB divergence

    The BoE hike trade has been priced out again now also as oil continues to slide and economic conditions for a hike are unjustified in the main, plus the small matter of the huge account deficit and borrowings keeps the UK at risk. The US dollar is favoured in the divergence between the two Central Banks and that is keeping GBP/USD bulls ring fenced.

    GBP/USD levels

    Technically, broke 1.4385 and the 30 year support line. That is a significant level. The low is just shy of the Jun 2010 stick's lows of 1.4344. However, the potential for an immediate test of 1.4300 is limited with strong oversold readings on the daily and weekly sticks. However, S3 stands at 1.4379 on a break lower.
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