FXStreet (Edinburgh) - The sterling seems to be gathering buying momentum vs. the greenback on Wednesday, pushing the GBP/USD to another test of the 1.6700 handle.
GBP/USD still capped by 1.6700
Despite decent figures from the UK GDP during the second quarter - expanding in line with expectations 0.8% inter-quarter and 3.1% on a yearly basis – the pound remains unable to pick up pace, with upside attempts limited by the 1.6700 mark so far. Spot is prolonging its downside momentum this week, triggered by a dovish tone by the BoE in its Quarterly Inflation Report. According to Karen Jones, Head of FICC Technical Analysis at Commerzbank, the pair “has tested and is so far holding the 200 day moving average at 1.6664. The rebound from here is indicated to terminate at 1.6760/1.6825, i.e. the rebound should halt ahead of the 6 week downtrend and while capped here the market will remain directly offered”.
GBP/USD levels to watch
As of writing the pair is up 0.02% en 1.6690 and a surpass of 1.6774 (Tenkan Sen) would target 1.6783 (23.6% of 1.7192-1.6657) en route to 1.6787 (10-d MA). On the flip side, the immediate support aligns at 1.6657 (low Aug.14) ahead of 1.6633 (76.4% of 1.6460-1.7192) and finally 1.6605 (low Apr.8).