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GBP/USD: Sell-off halted by a drop in EUR/GBP cross

FXStreet (Mumbai) - The sell-off in the GBP/USD pair came to a halt around 1.5040 levels on account of a sharp drop in the EUR/GBP pair following a weak Eurozone inflation number.

Recovery capped near 1.5060

The recovery in the cable stalled at 1.5060, following it quickly fell back to trade around 1.5060 levels. Sterling was offered across the board after the UK construction activity growth slowed down to multi-month lows. However, the cable found support due to the drop in the EUR/GBP pair following a weaker-than-expected Eurozone inflation release.

The focus now shifts to the US ADP report, which is expected to show labor market strength. That would be followed by Fed’s Yellen’s speech.

GBP/USD Technical Levels

At 1.5040, the immediate support is seen at 1.50, under which the pair could test 1.4951 (Jan 23 low). A break lower would expose 1.49 handle. On the other side, 100-DMA at 1.5064 could offer resistance, above which the pair could rise to 1.0587 (61.8% of Apr-Jun rally) and 1.51 (hourly 200-MA).

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