GBP/USD Taking A Breath Before Next Move

After reaching a new post-Brexit high of $1.3836 overnight, the GBP/USD is correcting lower limited by $1.3550 level representing 61.8 percent Fibonacci retracement line of post-Brexit slide lower.

With little-to-no news on the macro calendar scheduled for Wednesday, the GBP/USD is driven by market sentiment, especially concerning the US Dollar. There is a public appearance of the Bank of England Monetary Policy Committee member Michael Saunders scheduled for the mid-day, with his comments at the Financial Intermediary and Broker Association meeting in London expected to be rather general. Ahead of the Bank of England February Inflation report it is unlikely for the MPC members to comment on prospects for the UK economy or/and monetary policy.

The GBP/USD is moving in a sideways trend after jumping to post-Brexit highs recently and it will need another impact to continue in its Bullish run of late. As the GBP/USD is moving in tandem with EUR/USD and the ECB officials send Dovish signals regarding Euro’s current strength, both currency pairs are likely to move sideways for now.

Technical oscillators are painting picture of a corrective move sideways as well with both Slow Stochastics and the Relative Strength Index moving downward from the Overbought territory. The momentum indicator is also pointing downward on a daily chart.

GBP/USD daily chart