Sterling moves lower against the dollar

Sterling has pulled back from the gains it garnered in the aftermath of the US Federal Reserve’s decision not to begin tapering its stimulus programme.

GBP/USD is currently below the $1.60 level, and yesterday there was a short-lived move through the $1.5980 level.

The gradient of the current daily trend is fairly steep, so a move lower could well pull back towards the previous level of $1.5880, then to prior support at $1.5845 – a 23.6% retracement of the July uptrend to the recent highs – without upsetting the overall trajectory.

On the hourly chart, the cable pair is trapped in a bearish channel from the $1.6160 highs, and is finding support from the 200-hour moving average. This scenario, coupled with the return of the daily RSI from the overbought zone to neutral territory, creates a sideways bias unless we see the pair push back through the $1.6020 level.

Spot FX GBP/USD (DFB) chart

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