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GBP/USD consolidates the 1 cent drop

FXStreet (Guatemala) - GBP/USD is trading at 1.6489, down -0.71% on the day, having posted a daily high at 1.6617 and low at 1.6482.

GBP/USD momentum to the downside has slowed on the hourly’s, albeit perhaps momentarily and consolidating the one and a bit of a cent drop over the past couple of sessions. The market has pushed the dollar through stops across the board of late while data continues to back the requirement for a Fed rate hike. The hourly FXStreet OB/OS Index is showing extremely oversold conditions, alongside the FXStreet Trend Index which is slightly bearish.

Meanwhile, Analysts at Rabobank explained that as we approach the start of the Fed’s hiking cycle upward pressure on rates should increase. “However, the falling budget deficit, which leads to decreased net issuance, and the increased demand of pension funds and banks for US treasuries are likely to maintain downward pressure on longer-term rates”. The analysts also noted that speculation about further monetary policy loosening by the ECB is adding to downward pressure, as are geopolitical tensions. “Therefore, although we expect higher longer-term USD rates on a 12 month horizon, because we are getting closer to the first Fed rate hike, our forecasts are well below the market consensus”.

GBP/USD hourly levels

Current price is 1.6490, with resistance ahead at 1.6503 (Weekly Classic S2), 1.6522 (Daily Classic S3), 1.6540and 1.6545 (Hourly 20 EMA). Next support to the downside can be found at 1.6482 (Daily Low), 1.6471 (Weekly Classic S3), 1.6306 (YTD Low), 1.5544 (Annual Low) and 1.4868 (3 Year Low).

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