GBP/USD under pressure
GBP/USD is trading in the $1.5670/5600 range on Wednesday. Traders remain indecisive ahead of the tonight’s FOMC meeting. Yesterday the bears pulled the pound down by 150 pips to $1.5565. However, the pair closed above the $1.5600 level.
Decisive break below $1.5560 (yesterday’s low, 23.6% Fibo retracement from the recent rally) would confirm the bearish reversal. It makes sense to sell the cable on a break of this level with an initial target of $1.5500. Drop below this support would pave the ground for a deeper decline. Upside remains capped by the $1.5735 resistance (Monday’s 4-month high).
Analysts at SEB agree on the bearish prospects of the cable. In their view, a session close below $1.5625 would target $1.5490/60 and later also possibly the high-$1.53s.
Chart. H4 GBP/USD