GBP/USD off highs, back to 1.5170

FXStreet (Edinburgh) - The pound has given away initial gains and is now taking GBP/USD back to the 1.5170 area after reaching fresh tops around 1.5220.

GBP/USD looks to Carney

The pair is now looking to consolidate the trade between 1.51 and 1.52, after breaking below the 1.55-1.56 area that prevailed in the second half of December. The solid performance of the US dollar is to be blamed for the steep decline in spot, along with disappointing economic indicators, which have been kicking back rate hike expectations. Without data releases scheduled in the UK economy, the most relevant event today will be Governor Carney’s speech in the European afternoon. According to Jane Foley, Senior Currency Strategist at Rabobank, “The likelihood that low inflation will support UK consumption should also bring some good news for the pound this year. We expect 1.50 to offer strong psychological support for cable”.

GBP/USD levels to watch

At the moment the pair is gaining 0.05% at 1.5172 and a breakout of 1.5274 (high Jan.6) would open the door to 1.5311 (Tenkan Sen) and finally 1.5355 (high Jan.5). On the flip side, the next support lines up at 1.5077 (low Jan.13) followed by 1.5034 (low Jan.8) and then 1.5028 (low Jul.15 2013).