Carney's rate hike talk saves the day for GBP/USD

The GBP/USD pair initially dropped to a low of 1.3381 on Carney's cautious comments on household debt and low productivity, but quickly regained poise to trade around 1.34 after the BoE governor said rates could rise if the economy stays on track.

At press time, the currency pair is trading around 1.3402 levels. The recovery from the previous session's low of 1.3343 ran out of steam at a high of 1.3456 during the overnight trade.

BoE governor Carney, while talking to BBC radio, said, " Majority of MPC say may be appropriate to raise interest rates if the economy stays on track". He added, " indications are that the UK economy is on track for rates to increase and the rate hikes will be limited and gradual if they increase."

However, the recovery from the session low of 1.3381 is being capped around 1.3406 [1-hour 50-MA] as Carney talked about the shift from responsible lending to reckless lending. Ahead in the day,  UK GDP and US core PCE data could influence the GBP/USD pair.

GBP/USD Technical Levels

A break above 1.3439 [1-hour 100-MA] would expose 1.3484 [1-hour 200-MA] and 1.35 [zero levels]. On the downside, breach of support at 1.3381 [session low] could yield a sell-off to 1.3343 [previous day's low] and 1.3320 [38.2% Fib R of Aug 24 low - Sep 20 high].