GBP/USD erases gains as US dollar soars

The US dollar rose sharply in the market after comments from US President Trump regarding taxes. GBP/USD fell from 1.2570 to 1.2515 in a few minutes. The decline found support above Asian session lows. 

Cable erased gains and currently is trading at 1.2530, around the same level it closed yesterday. The tone of the pair turned bearish but so far it has been able to hold above a 2-day uptrend line that stands at 1.2510. 

Trump said that his administration will be announcing changes in taxes over the next weeks. Around the same time, Fed’s Bullard mentioned that fiscal uncertainty won’t be resolved by March and said that one rate hike in 2017 is necessary. 

The greenback rose sharply in the market during the last hour, particularly against the yen as equity prices jumped in Wall Street and US yields turned higher. 

GBP/USD levels 

To the upside, resistance levels might be seen at 1.2545 (Feb 7 & 8 high), 1.2580 (daily high) and 1.2610. To the downside, support could be located at 1.2505/10 (uptrend line), 1.2495 (daily low), 1.2475 (Feb 8 low) and 1.2425 (Feb 6 low).