Forex Analysis: GBP/USD Breaks 1.7000 for New Multi-Year High

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2014-06-19-GBPUSD

June 19, 2014 – GBP/USD (daily chart) has tentatively broken out above major 1.7000 resistance to establish almost a five-year high, a level not reached since the 1.7041 high back in August 2009. This breakout has surpassed the 1.7010 high that was hit earlier this week and has confirmed a continuation of the steep bullish trend that has been in place since the 1.4800-area low almost a year ago in July of 2013. As of this writing, the currency pair has reached up to within only a handful of pips from the noted 1.7041 high. Any further upside momentum could quickly establish a high not seen since October 2008.

For almost a year, the British pound has exhibited remarkably enduring strength against the U.S. dollar, as compared with other major currencies. This strength has continued while the euro has showed much less stellar gains and has recently faltered. If GBP/USD can maintain its strength above the key 1.7000 level, which may soon transform into support rather than its previous role as resistance, a major upside target resides around the 1.7250 resistance level. A failure to stay above 1.7000 could see the currency pair fall back towards the 1.6700 support level.

James Chen, CMT
Chief Technical Strategist
City Index Group

Forex trading involves a substantial risk of loss and is not suitable for all investors. This information is being provided only for general market commentary and does not constitute investment trading advice. These materials are not intended as an offer or solicitation with respect to the purchase or sale of any financial instrument and should not be used as the basis for any investment decision.

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About Author

James Chen is Chief Technical Strategist for City Index Group. He is also a Chartered Market Technician. He is the author of the books: "Essentials of Foreign Exchange Trading" (John Wiley & Sons, 2009) and "Essentials of Technical Analysis for Financial Markets" (John Wiley & Sons, 2010). Mr. Chen writes currency analysis, leads forex trading seminars and has appeared in numerous major financial media outlets, including CNBC, Bloomberg TV, Forbes, Reuters, Dow Jones, and the Associated Press.

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