GBP/USD drops to 1.7020

By FXstreet.com | Updated July 30, 2014 AAA

FXStreet (Edinburgh) - The weakness around the sterling is gathering traction on Wednesday, dragging the GBP/USD to fresh low near 1.7020.

GBP/USD in 3-week lows

Spot is retreating for the third consecutive week so far, retracing the upside to multi-year tops in levels just shy of 1.7200 the figure. Today’s BoE minutes disappointed GBP bulls, pouring cold water over expectations of an early rate hike (at least, earlier than market expectations). Governor Carney also accentuated the downbeat sentiment, stressing that rates will rise gradually. “The market reaction (GBP weakness) highlights how much good news is already priced into GBO and one of the major risk factors for the currency. We hold a Q314 forecast of 1.72 and a Q414 forecast of 1.70”, observed Camilla Sutton, Chief FX Strategist at Scotiabank.

GBP/USD levels to watch

As of writing, the pair is down 0.19% at 1.7033 and a breach of 1.7009 (low Jun.30) would expose 1.7001 (38.2% of 1.6693-1.7190) and then 1.6972 (low Jun.26). On the upside, the initial barrier lines up at 1.7095 (high Jul.23) ahead of 1.7101 (10-d MA) and finally 1.7143 (high Jul.17).

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