- The GBP/USD pair retreated back on Thursday as investors were cautious after a difference of opinion at the Bank of England over monetary policy added further uncertainty to the outlook for Britain's economy as it leaves the European Union.
- Barely a week after three members of the central bank's eight-strong rate-setting committee voted to hike record-low interest rates, two of the Bank's top officials gave opposing signals on the Bank's stance towards interest rates.
- Governor Mark Carney in a speech on Tuesday said it was not the right time to raise interest rates, while the Bank's chief economist Andy Haldane separately said he expected to vote for a rate rise later this year.
- Sterling weakened almost 1 percent after Carney's comments, but was bumped higher after Haldane spoke on Wednesday, recovering to as much as $1.2704.
- Further upside for this is expected to be limited as the pound presents negative tone and is set to resume downward momentum against the dollar in the short term.
- To the upside, the strong resistance can be seen at 1.2691, a break above this level would expose the pair towards next resistance level at 1.2776.
- To the downside, strong support can be seen 1.2604, a break below at this level will open the door towards next level at 1.2544.
Resistance Levels
R1: 1.2691 (50 % Retracement level)
R2: 1.2776 (61.8 % Retracement level)
R3: 1.2814 (June 19th high)
Support Levels
S1: 1.2607 (38.2% Retracement level)
S2: 1.2544 (Feb 1st lows)
S3: 1.2500 (23.6% Retracement level)
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