GBP/USD remains capped below 1.4200 in Asia

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 21, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Mumbai) - Having faced rejection just above 1.42 handle, the GBP/USD pair turned lower and came under renewed selling pressure in last hours after the risk-sentiment deteriorated across the financial markets.

    GBP/USD capped below 1.4200

    The GBP/USD pair trades -0.10% lower at 1.4176, hovering close to new session lows struck at 1.4168 some minutes ago. The pullback seen in the cable continues to get sold into the risk-averse market conditions, with the early risk-on fading completely on the back fresh selling seen in the oil prices, which weighs over the higher yielding assets, including the GBP.

    However, the downside looks limited as the recent upbeat employment data from the UK offered some respite to the bulls after the cable hit fresh six-years low near 1.4120 region following BOE Carney’s dovish comments, citing ‘now is not the time to raise rates’.

    The UK unemployment rate improved from 5.2% to 5.1% in November, its lowest level in a decade, whilst the jobless claims change for December ticked lower from -2,200 to -4,300.

    Calendar-wise, the UK docket remains absolutely empty and hence, the focus will continue to remain on oil and stocks for further momentum.

    GBP/USD Levels to consider

    The pair has an immediate resistance at 1.4204/20 (daily high/ Jan 20 High), above which 1.4244/50 (1h 100-SMA/ psychological levels) would be tested. On the flip side, support is seen at 1.4142 (daily S1) below which it could extend losses to towards 1.4123 (Jan 20 Low).
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