GBP/USD finds resistance at 1.6340 and retreats

FXStreet (Córdoba) - During the Asian session GBP/USD moved with a downside bias until found support at 1.6275, the lowest price in a week. Then gained bullish momentum and rose quickly to 1.6340, reaching a fresh daily high.

The area around 1.6340 capped the upside and as the US dollar regained strength across the board, pulled back toward 1.6300. Currently is attempting to hold above 1.6300.

EUR/USD affecting GBP/USD

While GBP/USD has been able to hold above 1.6050 and actually recovered during the last week, EUR/USD has been making fresh lows. “We expect GBP/USD to remain under modest downward pressure as it is likely that a falling EUR/USD rate will also drag GBP/USD lower even if the pound continues to outperform more broadly alongside the US dollar. As a result we have lowered our GBP/USD forecast for the end of Q2 2015 to 1.6250 from our previous forecast of 1.6700”, noted Lee Hardman, Currency Analyst at the Bank of Tokyo Mitsubishi UFJ.