Currency Analyst since 2010

GBP/USD is a bit below $1.5600

GBP/USD rose yesterday to the levels near $1.5670, but then closed below $1.5600. Today pound is trading on the downside, in the $1.5570 area.

The UK has released today a bunch of disappointing data: both manufacturing and industrial production missed forecasts and expanded in July by only 0.2% and 0.0% respectively. In addition, British trade deficit widened in June to -9.9B from -8.2B in May.

Yesterday the Bank of England gave a cautious outlook for UK economic prospects signaling that rate hikes remain very distant and that the idea that QE remains an option if circumstances deteriorate. This is a more dovish approach compared with the speculation about the Fed’s stimulus tapering, so the pressure on GBP may persist.   

Support is at $1.5550 before the key one in the $1.5505/5490 area (23.6% Fibo of the July-August advance, lower border of the rising channel, 200-day MA) and then $1.5430 and $1.5375. Resistance is at $1.5670, $1.5715 and $1.5750.  

Chart. Daily GBP/USD

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