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- GBP/USD is trading horizontally
- Next move will probably be down
- Tough resistance caps gains
The Pound is flatlining against the U.S. Dollar, but it will probably eventually go lower in time, says Richard Perry, an analyst at Hantec Markets.
The pair has been going sideways in a narrow range for the last 5 trading days and it is suggested any rallies in Sterling are offering traders an opportunity to sell.
“We continue to look to use any near term rallies as a chance to sell and expect further pressure on $1.2100 in due course. A close below $1.2100 opens $1.1980,” says the analyst.
There is still a risk of a temporary bounce before the next sell-off but if such a bounce occurred, it would in all likelihood be capped by resistance at 1.2250, followed by a band of chart resistance between 1.2380 -1.2440 and the trendline at around 1.2415.
The GBP/USD exchange rate stands out from the crowd of more volatile Dollar pairs. Versus emerging market currencies USD is rising whilst against commodity currencies, it is falling.
“Amidst all the volatility of other forex majors, Cable has barely budged in recent sessions,” says Perry. “In the massive dichotomy of performance versus the US dollar on the majors (safe havens versus higher risk commodity currencies) Cable has found a quiet corner to rest. Within the context of the negative medium to longer-term outlook, Cable is consolidating.”
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