GBP/USD isn’t one of the most predictable pairs out their. It tends to be quite choppy. Yet in recent trading, there’s one super strong line – 1.5650. It was first tested as a support line in the middle of October, stopping cable’s fall for two straight days.
After the Irish crisis intensified and British exposure to Irish banks was digested by the market, GBP/USD lost this line and went deeper. And now, when the situation in Europe is improving, and most currencies rose against the dollar, GBP/USD found resistance at the exact same line – 1.5650.
The British pound also enjoyed a superb manufacturing PMI figure which scored 58 points, while expectations stood on only 55 points. On the other hand, the Wikileaks documents that show Mervyn King’s political opinions hurt the pound – as the independence of the BoE is endangered.
All in all, resistance is strong at 1.5650. For more technical levels and analysis, see the GBP/USD forecast.