GBP/USD drops to 50% Fibo on dollar demand

The insatiable thirst for the US dollars on speculation of a steeper Fed rate hike path has pushed the GBP/USD pair down to near 1.2378 (50% fib retracement of Oct 25 low – Nov 11 high).

Cable trades around 1.24

At the time of writing, the spot was trading around 1.24 levels. The spot dropped to a low of 1.2384 as the Asian desks responded to the overnight upbeat US data releases and hawkish comments from Fed’s Yellen.

This is the fifth straight day of losses for the British Pound. The UK data calendar is light; hence the treasury yields could continue to guide the pair in Europe. Later in the day, comments from BOE’s Broadbent and Fed’s Bullard could influence the pair.

GBP/USD Technical Levels

A move back above 1.2409 (previous day’s low) would open doors for a possible break above the session high of 1.2426 and a move to 10-DMA level of 1.2458. On the other hand, breach of support at 1.2378 (50% fib retracement of Oct 25 low – Nov 11 high) would shift risk in favor of a drop to 1.2354 (Nov 9 low) and 1.23 (zero figure) handle.