The sunny weather has given way to cloud cover by midday in London, and sterling’s outlook looks gloomier at present, despite the fact that we are about to recover all economic ground lost since the 2008 peak.
The upward trend in GBP/USD is intact, but the price appears to be heading back towards the 50-day moving average, with the possibility of testing the lows seen in the final week of February, around $1.6580.
The GBP/USD pairing has been constrained in a relatively tight trading range in recent weeks, bounded by $1.6600 on the bottom and towards $1.6800 on the top. Any bias to the downside, which is the move we are seeing today, is likely to be capped by the rising trendline of the July 2013 lows.
At the moment, the downward move means the 24 February low, around $1.6580, is the first target and area of support to look for.