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GBP/USD fades a spike to 1.4534, drops back below 1.4500

09:46 23 May /2016 Forex

As the European trading session gets underway, the GBP/USD pair reversed its bullish spike to 1.4534 and has now dropped back to 1.4500 handle.

The pair turned negative and dropped to an intraday low level of 1.4582 before recovering back to currently trade absolutely flat from Friday’s close at 1.4500 handle. The pair has now started showing signs of weakness below 20-day SMA (1.4500 level) and hence, might turn vulnerable to further downside.

'Brexit' update continues to drive sentiment across GBP pairs. With the 'Remain' camp holding an overall lead, the pair seems to take cues from European equities that have opened weak on Monday.

Technical levels to watch

Sustained weakness below 1.4500 handle is likely to get extended towards 1.4450 intermediate support ahead of 1.4400 round figure mark support. A follow through selling pressure below 1.4400 level has the potential to force the pair back towards retesting 50-day and 100-day SMAs confluence support near 1.4360-40 region.

On the flip side, above 1.4500 handle, the pair is likely to make a fresh attempt to inch back towards 1.4555-60 intermediate resistance, which if conquered paves way for an up-move beyond 1.4600 handle towards testing its next major resistance near 1.4640-50 zone.