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GBP/USD supply keeping a lid on it

FXStreet (Barcelona) - GBP/USD is trading at 1.6052, down -0.36% on the day, having posted a daily high at 1.6133 and low at 1.6011.

GBP/USD has had set backs in respect of the dovish BOE minutes and a strong greenback with an increase on the expectations of the CPI reading in the US of 0.1%. The pair has been drifting higher since on a rebound and profit taking post the drop that was testing the 1.6010 support. However, supply is keeping a lid on it at 1.6080 for now.

In respect of the pound, it’s a story of disinflationary pressures that are mounting and due to hold the BoE back from increasing rates as soon as markets had been pricing in. analysts at RBS explained that whilst disinflationary pressures are far less acute in the UK than the euro area, they are nevertheless increasingly apparent. “A combination of softer global demand, the belated impact of a global commodity supply boost and muted domestic wage inflation suggest that precaution rather than pre-emption will define BoE monetary policy for much of the year ahead”. The RBS forecast is for the first 25bp hike in August 2015 with rates reaching 1.0% at end-2015 and 1.5% at end-2016

GBP/USD noteworthy levels

With spot trading at 1.6055, we can see next resistance ahead at 1.6082 (Hourly 20 EMA), 1.6085 (Daily Classic S1), 1.6104 (Hourly 100 SMA), 1.6110 (Yesterday's Low) and 1.6113 (Daily Open). Support below can be found at 1.6059 (Daily Classic S2), 1.6058 (Hourly 200 SMA), 1.6032 (Weekly Classic PP), 1.6019 (Weekly Low) and 1.6011 (Daily Low).

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