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Forex pairs in this Article » GBP/USD (Bali) - Sterling's technical tone deteriorated markedly last week, notes Marc Chandler, Global Head of Currency Strategy at BBH.

Key Quotes

"It posted a key reversal before the weekend by making new multi-year highs in Asia near $1.6670 and then selling off sharply, as Carney indicated no rate hike any time soon."

"Sterling had traced out a similar pattern on January 2 and proceeded to fall another cent before finding stronger bids. The RSI is shows a bearish divergence and is pointing down, while the MACD has been showing divergence since mid-December."

"A break of the $1.6465 area, which corresponds with the 20-day moving average, the uptrend line drawn off last July and November lows, and a Fibonacci retracment (~$1.6450) would be an ominous technical development. It could spur a move toward $1.6200-50 in the coming weeks, ahead of the February 12 Bank of England inflation report. BOE Governor Carney has indicated that forward guidance will be updated then."
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