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GBP/USD moving against the grain on the 1.61 handle

FXStreet (Barcelona) - GBP/USD is trading at 1.6130, up 0.25% on the day, having posted a daily high at 1.6149 and low at 1.6081.

GBP/USD has managed a significant performance considering the fundamentals that are driving the outlook for 2015. The pair is up onto the 1.61 handle again after the long positions of late had been trimmed given that the first hike from the BoE is unlikely to be in the first quarter or even half of 2015 due to the disinflationary environment and the wages outlook in the UK’s labour market.

Despite this, the pound is strong at the start of the week while the greenback has given back some ground on the US open with US pending home sales growing just 0.3% in September versus the 0.5% gain expected. Nevertheless, the overall outlook for sterling is still coming with a bearish bias.

GBP/USD is bearish while capped at 1.6167/84

Karen Jones, chief analyst at Comemzbank explained that immediate resistance is offered by the 23.6% retracement at 1.6184 and just ahead of the here lies the downtrend at 1.6167 today. “While capped here, a negative bias remains. We continue to target the 1.5855 November 2013 low. Beyond this we look for losses to 1.5721 the 61.8% retracement of the move from 2013".

GBP/USD noteworthy levels

Current price is 1.6131, with resistance ahead at 1.6149 (Daily High), 1.6152 (Daily Classic R2), 1.6163 (Weekly High), 1.6185 (Weekly Classic R1) and 1.6203 (Daily Classic R3). Next support to the downside can be found at 1.6120 (Daily Classic R1), 1.6105 (Hourly 20 EMA), and 1.6089 (Weekly Classic PP).

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