FXStreet (Edinburgh) - Renewed weakness around the greenback is allowing the GBP/USD to print multi-year highs above the 1.7000 handle on Thursday.
GBP/USD supported by FOMC
A surprising dovish statement by the FOMC on Wednesday ignited the buying interest for riskier assets, giving extra wings to the pound and thus lifting spot above the psychological 1.7000 handle, where it now looks to consolidate. In addition, recent BoE minutes and the tone from MPC members were also supportive of the GBP, collaborating with the upside. In the UK data front, Retail Sales expanded at an annual pace of 3.9% in May, missing forecasts for 4.3% and down from 6.5% in April. Emmanuel Ng, FX Strategist at OCBC Bank, assessed, “The BOE MPC minutes provided little ammunition for GBP bulls despite a slight hint of a more hawkish discussion but subsequent dollar weakness pushed the pair back towards the 1.7000 vicinity… the 1.7000 resistance (before 1.7040/45) still expected to be flimsy in the current environment. On the ø downside, support is expected to emerge on dips to 1.6900”.
GBP/USD levels to consider
The pair is now up 0.16% at 1.7022 and a breakout of 1.7044 (high Aug.5 2009) would expose 1.7100 (psychological level) and finally 1.7105 (low Oct.20 2008). On the downside, the immediate support aligns at 1.6920 (low Jun.18) followed by 1.6900 (psychological level) and then 1.6855 (daily cloud top).