GBP/USD drops below 50-DMA

GBP/USD is back below 50-DMA level of 1.4250 in early Europe despite China led risk-on in the financial markets.

Trades below key Fibo

At 1.42478, the spot is also trading below 1.4252 (50% of 1.4669-1.3835) levels. Previous session’s strong UK CPI report did push Cable to a high of 1.4348, but hawkish talk from Fed officials and IMF’s take over Brexit saw the pair surrender gains and drop to 1.42 levels.

Moderate recovery in Asia ran out of steam near 1.4280 levels before the pair fell back below 50-DMA Levels. Given the economic calendar in UK is empty; the focus is likely to be on the action in the equity markets.

GBP/USD Technical Levels

The immediate resistance seen at 1.4279 (daily low), if breached, shall open doors for 1.4330 (23.6% of 1.5930-1.3835) beyond which previous daily high of 1.4348 could be put to test. On the other hand, acceptance below 1.4252 (50% of 1.4669-1.3835) would indicate a possibility of a drop to 1.4205 (10-DMA). Next major support is noted at 1.4154 (38.2% of 1.4669-1.3835).