Forexpros – The pound turned lower against the U.S. dollar on Monday, as initial euphoria which greeted new measures to ease the debt crisis in the euro zone faded amid uncertainty over how the plans are to be implemented.
GBP/USD hit 1.5642 during European morning trade, the session low; the pair subsequently consolidated at 1.5659, shedding 0.26%.
Cable was likely to find support at 1.5508, Friday’s low and resistance at 1.5713, Friday’s high and a six-day high.
On Friday, European Union leaders agreed to use the euro zone’s bailout funds to support struggling banks directly, without adding to national debt, and also agreed to set up a joint banking supervisory body for the euro area.
Markets rallied following the announcement, with the pound jumping more than 1% against the dollar, as expectations for concrete progress on dealing with the crisis had faded in the run up to the talks.
However, investor sentiment cooled as details about how and when European leaders can put the newly agreed measures into practice remained uncertain.
Investors were also looking ahead to the outcome of the Bank of England’s policy meeting on Thursday, amid growing expectations that the central bank may implement a third round of quantitative easing measures to shore up growth in the recession hit U.K. economy.
The pound was slightly lower against the euro, with EUR/GBP easing up 0.09% to 0.8068.
Later in the day, the U.K. was to release data on manufacturing activity, while the Institute for Supply Management was to release a report on the U.S. manufacturing sector.
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