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GBP/USD drops to lows near 1.6170

FXStreet (Edinburgh) - The selling interest around the sterling seems to be taking over once again, dragging GBP/USD to the 1.6180/75 area.

GBP/USD remains depressed

The generalized mood surrounding the riskier assets continues to weigh on the pound, coming down from an unsuccessful attempt to regain the mid-1.6200s. The softer than expected manufacturing PMI played against any recovery attempt today, while traders aim to the more relevant PMI from the services sector due on Friday. “GBP is soft and the chart pattern looks vulnerable to further near term downside risk… We expect the currency to stabilize, particularly as Governor Carney has shown no sign of easing off on interest rate hikes; however in the current broadly based period of USD strength, GBP is also likely to fall victim”.

GBP/USD levels to watch

The pair is now 0.18% at 1.6183 and a breakdown of 1.6052 (low Sep.10) would expose 1.6003 (50% of 1.4814-1.7192) and then 1.5988 (low Nov.14 2013). On the flip side, the initial hurdle aligns at 1.6277 (21-d MA) followed by 1.6300 (10-d MA) and finally 1.6333 (high Sep.26).

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