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GBP/USD Daily Forecast Sterling Holds Near Important Support Level

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GBP/USDis showing resilience as it holds above a major technical level despite several recent developments.

Last week, several members of the Bank of England expressed their dovish views towards monetary policy and that easing might be needed to support the economy. Yesterdays GDP report from the UK confirmed the views of the policymakers and further increased the odds that a rate cut is looming.

Despite this,GBP/USDhas been able to hold below a horizontal level at 1.2975. Well, technically speaking, it is currently trading below it but its much too early to call it a downside break. The importance of the technical level is that it held the currency pair lower from around the middle of October until an eventual upward break in December. Technical traders will certainly have their eye on this level and make decisions based on the reaction from it.

While Sterling is showing some resilience, it is certainly not showing strength. The currency is down about three-quarters of a percent against the greenback in the week thus far and is the weakest among the major currencies. Traders will likely want to see a sign of strength from here before making an attempt at positioning long.

Later in the session today, the latest Consumer Price index figures will be released out of the United States. Analysts are expecting the index to have risen 0.2% last month and volatility is expected following the release.

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