Fundamentally, US dollar
investors are patiently waiting for a rate rise by the mid of this year. The BoE is also using the same hawkish tone by which an interest rate rise is not impossible in the short time. The BoE inflation
fell in January of this year to 0.5% given that its target rate is 2%, which increase the BoE concern over the threat of deflation. The BoE has stated that slump in oil
prices is one of the main reasons why inflation
fell in January, they also stated that the wage growth rate is not picking up as it should. Given that the Fed and the BoE are the only banks that are about to rise interest rates, their prices are trading in a wide range since Jan of this year. I believe that investors are more biased to a sooner rise in the US interest rates than the UK and the selling pressure on the British Pound will continue.
Technically, The overall picture shows a downtrend since July,2014. However this downtrend is currently stagnating. I don't believe that a reversal of the trend could happen anytime soon, but the downtrend should continue at a much slower pace. A break below the 1.498 level or the bottom Blue trend line
shall take us back to test the 1.492 level support. Prices are not oversold on RSI
Trade this short.