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GBP/USD: off lows, re-takes 1.4200 ahead of Carney

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 26, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - The GBP/USD pair extends the overnight slide in the European session, and now trims losses in a bid to reclaim 1.42 handle.

    GBP/USD heads towards multi-year lows?

    The GBP/USD pair trades -0.42% lower at 1.4189, retreating slightly from fresh three-day lows struck at 1.4176 some minutes ago. The major met fresh supply at hourly 100-SMA (1.4225) and dropped sharply in the last hours, as steep declines on the European stocks added to the already risk-averse market conditions and rattled investors confidence in higher-yielding currencies such as the GBP.

    Risk-off trades extended into Europe, with the oil prices resuming their decline and Chinese stock markets crashing almost 6%, which once again reinforced worries over the health of the global economy, especially Chain’s.

    Markets also sold-off the pound across the board in anticipation of more dovish comments from the BOE Governor Carney at its testimony on the Financial Stability Report before the Treasury Select Committee due later this session.

    GBP/USD Levels to consider

    The pair has an immediate resistance at 1.4263/65 (1h 200 & 50-SMA), above which 1.4295/ 1.4300 (daily R1/ round number) would be tested. On the flip side, support is seen at 1.4168 (daily S2) below which it could extend losses to towards 1.4127 (Jan 19 Low).
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