GBP/USD down to test key 1.5850; the dance of the rates

FXStreet (San Francisco) - The British Pound was unable to maintain levels above 1.5900 against the US dollar and after testing daily highs at 1.5915, GBP / USD found selling interest that launched the pair all the way down to 1.5850.

Currently, GBP/USD is trading at 1.5851, down -0.14% on the day, having posted a daily high at 1.5919 and low at 1.5852. GBP/USD spot is in neutral territory according to the hourly FXStreet OB/OS Index, while the FXStreet Trend Index is slightly bearish.

GBP/USD sentiment

As Ross J Burland commented in a recent report, the GBP/USD was offered through the 1.5900 level and has closed the bullish gap. With "the unemployment numbers in the US to the lowest since 2008, markets are confident of [Fed] rate hikes to come in 2015;" on the other hand, the GBP "trades in the shadows of a disinflationary environment in the UK," that postpone "the first BoE hike pushed even further into the future."

In this framework, if the GBP/USD successfully breaks below the 0.5850, it will find next supports at 1.5810, 1.5800 and 1.5790. To the upside, resistances are at 1.5915, 1.5950 and 1.6000.