GBP/USD surrenders gains, at 1.6570

By FXstreet.com | August 22, 2014 AAA

FXStreet (Edinburgh) - The sterling gave away initial gains to the boundaries of 1.6600 the figure on Friday, with the GBP/USD now coming down to test lows near 1.6570.

GBP/USD faded the post-BoE spike

The better risk sentiment on Thursday boosted spot to fresh intraday peaks in levels just shy of the 1.6600 handle, although the bull attempt run out of legs pari pasu with a re-emergence of dollar buying. Therefore, the pound leaves behind the spike after a hawkish tone from the BoE minutes, just to join the rest of the risk related assets on their way south. “With the 200-day MA (1.6682) now serving as a resistance, the pair may continue to grind lower in the coming sessions pending the news flow from Yellen and Draghi later today. Note that the previous occurrence of a sustained break of the 200-day MA in 2013 did not work out so well for the GBP-USD with an approximate -6.75% decline thereafter by March 2013”, noted Emmanuel Ng, FX Strategist at OCBC Bank.

GBP/USD levels to watch

As of writing the pair is retreating 0.03% at 1.6574 with the next support at 1.6564 (low Aug.21) ahead of 1.6555 (low Apr.4) and finally 1.6460 (low Mar.24). On the upside, a breakout of 1.6602 (high Aug.21) would open the door to 1.6677 (10-d MA) and then 1.6680 (200-d MA).

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