Search ForexCrunch
  • GBP/USD hits fresh lows on the back of a stronger USD, quickly rebounds back above 1.3200.
  • Pound drops against the US Dollar after a 3-dayrally, remains vulnerable below the 20-day moving average.

The rally of the GBP/USD that started last Thursday after the Bank of England decision from 1.3100 was capped by the 20-day moving average slightly above 1.3300. On Tuesday, the pair pulled back and bottomed during the American session at 1.3190.

Near the end of the session, it was hovering around 1.3230, down 40 pips for the day but far from the lows, with short-term charts looking bearish. So far the correction has been limited by the 1.3200 handle.

The pound weakened today on the back of the announcement that Jonathan Haskel will replace Ian McCafferty at the BoE Monetary Policy Committee. The greenback recovered ground following a 3-day slide and was the top performer among majors.

Technical outlook

“The   GBP/USD pair 4 hours chart shows that it fell below its 20 SMA, the first time since BOE’s boost (Thursday), while technical indicators entered negative territory, with nice downward slopes and at fresh weekly lows, anticipating some further declines ahead”, said Valeria Bednarik, Chief Analyst at FXStreet.

According to her, bulls will become more courageous on a break above 1.3315, while renewed selling pressure below the 1.5180 region exposes the 1.3100 figure, the 2018 low.