GBP/USD testing descending trendline resistance

By FXstreet.com | Updated August 04, 2014 AAA

FXStreet (Guatemala) - GBP/USD is trading at 1.6845, up 0.14% on the day, having posted a daily high at 1.6848 and low at 1.6814.

GBP/USD is testing the descending trend line resistance here, while the FXStreet OB/OS Index is reflecting neutral hourly conditions, although the FXStreet Trend Index is slightly bullish despite recent dollar strength. The greenback was supported on, not great, but firm enough jobs numbers on Friday, despite missing market expectations. However, Investec Bank Treasury market analysts explained that the underlying reason for dollar strength of late has been market expectations around the Federal Reserve tightening monetary policy, potentially raising the Fed funds rate sooner and perhaps more quickly than markets had been expecting. “The dip in US equity markets last week is further evidence of this as investors begin to consider the system will not be so awash with cash to invest as the Fed is down to $25bn per month in asset purchases, which has reduced from $85bn per month last October”.

GBP/USD Levels

With spot trading at 1.6845, we can see next resistance ahead at 1.6860 (Daily 100 SMA), 1.6873 (Daily Classic R1) and 1.6889 (Hourly 100 SMA). Support below can be found at 1.6843 (Daily Classic PP), 1.6834 (Hourly 20 EMA), 1.6831 (Daily Open), 1.6822 (Monthly Low) and 1.6822 (Weekly Low).

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