Over the last 24 hours the GBP/USD has fallen lower again down below 1.52 and to levels not seen since early April. It appears to be consolidating a little around the support level at 1.52, which has temporarily halted the slide of the last week. The pound has now experienced a strong fall over the last week or so. Prior to the last week, the pound has enjoyed a strong couple of weeks and move to new highs above 1.56. It experienced all sorts of bother at 1.56 as it made several pushes to this significant level however it was turned away with excessive supply. For about a week it ran into a wall of resistance right around the 1.56 level which is very evident in the 4 hourly chart below. This showed how much buying pressure there was on the 1.56 level but equally how well that level provided resistance to any movement higher. The pound had enjoyed a very solid couple of weeks moving from the support level at 1.52 to reach new highs at 1.56, a new ten week high.
Only a few weeks ago, it found solid support at 1.52 for about a week which greatly assisted the recent surge higher, and now this level is being called upon again to offer some support and a soft landing. In the last 24 hours at least, we have seen evidence of that as the decline has been halted. The last week has seen the pound fall strongly and return almost all of its gains from the last few weeks. About a month ago the 1.54 level provided a little piece of resistance and this level has since been broken as it offered limited support. Now that the pound has drifted back down below 1.54, it may provide some resistance again. During its push to 1.56, the pound was able to find some support at 1.55, although this level has also been broken last week. Over the last month or so, the GBP/USD has been experiencing a variety of different levels which have played a role on the price action.
Towards the end of March the GBP/USD was trading within a range roughly between 1.51 and 1.5250 and now on a couple of occasions it has been able to move outside that range and push higher. A few weeks ago, the 1.5350 level was one of significance as it offered resistance before the GBP/USD was able to move higher through to 1.56. In early March the pound moved to new lows around 1.4830 from a starting point near 1.64 at the beginning of the year. With the surge higher over the last couple of months, the GBP/USD had completely turned around its fortunes from earlier in the year, however it is starting to ease off and return most of the good work.
Bank of England Governor Mervyn King offered some rare good news for Britain’s economy on Wednesday when he presented his final set of economic forecasts before stepping down after more than 20 years at the bank. For the first time in years, the central bank predicted that growth would be faster and inflation lower than it expected three months earlier, though King still warned the recovery could not be taken for granted. “Today’s projections are for growth to be a little stronger and inflation a little weaker than we expected three months ago. That’s the first time I’ve been able to say that since before the financial crisis,” King told reporters. “But this is no time to be complacent. We must press on to ensure a recovery and to bring down unemployment.” Sterling rose against the dollar after the forecasts. British government bond prices extended their losses. 
GBP/USD May 16 at 02:00 GMT 1.5241 H: 1.5272 L: 1.5173
GBP/USD Technical" title="GBP/USD Technical" width="598" height="78">
During the early hours of the Asian trading session on Thursday, the GBP/USD is rallying a little higher moving up away from 1.52, after having recently fallen strongly down to a three week low at 1.52 in the last few hours. Throughout the first part of this year, the pound fell very strongly from the key resistance level at 1.63 level down to levels not seen in two and a half years and has done well the last month to rally well and move back up above 1.56. Current range: Right around 1.5240.
Further levels in both directions:
• Below: 1.5200 and 1.5100.
• Above: 1.5600.
(Shows the ratio of long vs. short positions held for the GBP/USD among all OANDA clients. The left percentage (blue) shows long positions; the right percentage (orange) shows short positions.)
The GBP/USD long positions ratio has moved back up above 50% after the GBP/USD has fallen down to the three week low near 1.52. Trader sentiment has shifted to in favour of long positions.
Economic Releases
- 04:30 JP Capacity Utilisation (Mar)
- 04:30 JP Industrial Production (Final) (Mar)
- 09:00 EU HICP (Final) (Apr)
- 09:00 EU Trade Balance (Mar)
- 12:30 US Building Permits (Apr)
- 12:30 US CPI (Apr)
- 12:30 US Housing Starts (Apr)
- 12:30 US Initial Claims (10/05/2013)
- 14:00 US Philadelphia Fed Survey (May)
- EU ECB Governing Council Meeting hold non-rate setting meeting