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GBP/USD spikes on news of China taking action

FXStreet (Guatemala) - GBP/USD is trading at 1.6278, up 0.28% on the day, having posted a daily high at 1.6307 and low at 1.6162.

Volatility is here again and this was already likely to be a week of turbulence in the markets on fundamentals that we are awaiting, but here, as we felt braced in a stable cable, that apple cart just got shook up on news that that China has injected liquidity to the five biggest banks in the country and up to a tune of 500 billion Yuan. This is a factor seeing the greenback lower as traders exit safe haven assets with risk apatite flooding in. However, knee jerk moves on the news may be short lived, as we are already seeing through the EUR and the Yen. Traders may not wish to be too positioned up as we head onto the FOMC later this week and similarly, sterling has it’s own concerns ahead with the Scottish Independence Referendum date approaches fast on Thursday 18 September 2014.

GBP/USD hourly levels

Spot is presently trading at 1.6279, and next resistance can be seen at 1.6280, 1.6304 (Daily Classic R2), 1.6327 (Daily Classic R3) and 1.6347 (Weekly Classic R1). Next support to the downside can be found at 1.6268 (Daily Classic R1), 1.6267, 1.6245 (Daily Classic PP), 1.6233 and 1.6223 (Hourly 100 SMA).

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