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GBP/USD set to test 1.4300 amid risk-off

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 27, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - The GBP/USD pair extends its corrective slide and inches closer towards 1.43 handle amid a classic risk-off environment marked by falling oil and stocks.

    GBP/USD trades above daily pivot at 1.4294


    The GBP/USD pair trades -0.31% lower at fresh session lows of 1.4306, having faced strong offers near 1.4350 region. The major reverses a part of yesterday’s rally and remains vulnerable as the slide in the oil prices refuelling risk-off trades across the financial markets and almost killed the demand for risk currencies such as the GBP.

    The cable remains little affected by the expectations of an upbeat GDP print due tomorrow and keeps the offered tone intact as long as oil price action continues to dominate markets.

    On Tuesday, GBP/UD rallied to weekly highs near 1.4370 and completely ignored the dovish comments from BOE Governor Carney at his testimony in London. Carney noted that conditions are not right for a rate hike, while he also added that BOE could cut rates if necessary.

    Attention now remains on the Fed decision due later today for further momentum on the major.

    GBP/USD Levels to consider

    The pair has an immediate resistance at 1.4367 (Jan 26 High), above which 1.4400/17 (round number / daily R1) would be tested. On the flip side, support is seen at 1.4294 (Daily pivot) below which it could extend losses to towards 1.4252/51 (1h 200-SMA/ 10-DMA).
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