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Forex: GBP/USD upside capped at 1.5680


After the failed attempt to break above 1.5680, the sterling is back to trade around the mid 1.5600s, as risk aversion continues to gather pace on Wednesday.

In light of the speech by M.Carney before the Treasury Selected Committee on Thursday, Rich Kelly, analyst at TD Securities commented, “We see the morning biased to being less dovish than the market may be expecting from Carney, and potentially even boring if Carney looks to avoid saying too much, followed by the BoE being neutral to perhaps slightly dovish (we see unchanged QE but reinvesting maturing gilts)”. The analyst also remarked that GBP/USD might break below long-term support in case the BoE extends QE.

At the moment, the cross is down 0.02% at 1.5652 facing the next support at 1.5628 (low Feb.5) ahead of 1.5578 (low Aug.10) and finally 1.5573 (low Aug.8).
On the upside, a breakout of 1.5748 (MA10d) would aim for 1.5805 (high Feb.5) en route to 1.5872 (MA21d).

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