FXStreet (Mumbai) – The cable’s recovery from multi-month lows lost steam near 1.4850 and the prices drifted lower on the back of a negative start to the European markets.
GBP/USD reverts to 1.48 handle
The GBP/USD pair trades marginally lower at fresh session lows of 1.4812, easing-off 1.4845 highs posted in recent dealings. The GBP bears fought back control in the European morning, now sending GBP/USD back in the red zone, as sentiment towards higher yielding currencies soured after the European stocks opened on a bearish note tracking lower oil prices.
Moreover, the major ignored upbeat economic news from the UK and remains pressured as the divergent monetary policy outlook between the Fed and BOE continues to keep the pound supressed. Fed is on track to raise interest rates gradual further next year while the BOE hike bets appears dwindling on weaker fundamentals.
Calendar-wise, the UK house prices increased 0.8% between November and December, pushing the annual rate of price growth to 4.5%. Both figures are above the previous month’s level and more than market expectations. Looking ahead, focus now remains on oil prices ahead of the US housing data due later in the day.
GBP/USD Levels to consider
The pair has an immediate resistance at 1.4864 (1h 50-SMA), above which 1.4878/88 (5-DMA/1h 200-SMA) would be tested. On the flip side, support is seen at 1.4800 (round number) below which it could extend losses to 1.4787 (Dec 29 Low).
The cable’s recovery from multi-month lows lost steam near 1.4850 and the prices drifted lower on the back of a negative start to the European markets.
(Market News Provided by FXstreet)