Sterling bears in full flow
GBP/USD has reached a key technical area of resistance to the downside at $1.556, which the pair has since bounced off heading into the London open session on Thursday. Wednesday’s FOMC release saw a rather muted approach to talk of rate normalisation as well as a downplaying of the role oil has, or indeed may have, in exacerbating pre-existing fears regarding global deflation. As a result, both stocks and the dollar have come in for widespread support.
The intermediate directional bias in GBP/USD is likely to be determined by a close either side of the aforementioned $1.556 level. A close above could signal a re-testing of topside support at $1.560-$1.565, while a close below sees the next clear level of resistance at the $1.547 level.