December 8, 2022

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GBP/USD nears the week’s lows after failure to contest 1.3900 level

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GBP/USD falls to 1.3805, keeps more sluggish to start the day

GBP/USD H1 16-07
The pair hit a high of 1.3898 yesterday after more hawkish remarks by BOE policymaker, Michael Saunders. In case you missed it, you can check them out here.

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There was a bit of a pullback after nearing 1.3900, a key level which has limited gains in the past two weeks, and the dollar’s resilience only adds to that as price now retraces further back towards 1.3800 in what has been a relatively choppy week.

The 1.3800 level offers some near-term support but below that, further support is seen closer to the swing region around 1.3750-60 next. The 2 July low @ 1.3731 will be a key one to watch on a downside break as that could accelerate the momentum.

Below that, there is the 200-day moving average @ 1.3686 that will come into play.

Those are the key technical levels to keep an eye out for in case we see a drop below 1.3800 in the sessions ahead.

In the bigger picture, the BOE has been playing it slow with regards to normalising policy but if Saunders’ remarks yesterday was a start and if there is some follow through, perhaps the pound can find more reasons to challenge for a move higher.

That said, key word in that passage is if of course.

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