The British pound trading lower intraday against the US dollar, as the market sentiment still weighs on the GBPUSD pair. The recent economic data showed weakness in the UK’s production sector, which resulted in a down-move in the British pound. However, the pair is heading towards an important support level, which might act as a barrier for sellers in the short term. There is a major risk event lined up later today I.e. the Bank of England will announce the interest rates. There are no changes expected by the forex market, and it would be interesting to see how the GBPUSD pair reacts post event.
There is an important bullish trend line formed on the hourly chart for the pair, which could possibly act as a support for the pair. The negative point to note is that the pair is trading below the 100 hourly moving average. Moreover, the hourly RSI is also below the 50 mark, which might increase the bearish pressure in the short term. So, the pair must hold the highlighted trend line, as a break below could ignite a sharp move lower in the pair maybe towards the 1.6750 level where buyers might reappear again.
On the upside, if the pair bounces from the current or a bit lower levels, then initial resistance can be seen around the 100 hourly moving average. If the pair manages to close above the mentioned moving average, then it would put the pair back in the bullish zone.
Overall, dips can be considered as an opportunity for buying with a tight stop below the last low of 1.6810.
Posted By Simon Ji of IKOFX
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