Chart Analysis: GBP/USD

The GBP/USD was down testing close to the two-week low of 1.6250 Tuesday. This area also coincides with the 21- and 55-day moving averages and serves as the trigger for a larger downside view if a break holds.

It is always interesting when the Forex Online market is trading close to key levels ahead of big events, like FOMC later on today and Bank of England meeting on Thursday (just to name the two biggies) If support survives for now, the focus reverts to perhaps 1.6500 as an upside swing level and then the 1.6700 area.

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Dollar quickly returns to losing ways

The Dollar rally at the end of last week ended Monday, as the Dollar fell broadly. The decline confirmed thoughts that the rally on Friday had more to do with end of month short coverings, than optimism over the USD’s viability in the Forex market.

The Dollar was not helped by more manufacturing and housing data from the US that continued to show a resurgence of strength, prompting investors to go for assets with more risk and higher yields.

At 12:00 AM GMT, the Dollar was trading down .24% to the Euro to 1.482, down .09% to the Japanese Yen to 90.26, down .32% to the Canadian Dollar to 1.0775, down .18% to the Australian Dollar to .9034 and down .04% to the New Zealand Dollar to .7177.

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