June 30, 2014 – GBP/USD (daily chart) has continued its bullish momentum as it re-approaches its new five-year high of 1.7062 that was just established little more than a week ago. Not since late 2008 has this currency pair reached such lofty highs. Overall, since its low around 1.4800 in July of last year, GBP/USD has risen by more than 15% in less than a year, far outperforming its major currency pair counterparts.
The current highs above the key 1.7000 level were the result of a pronounced surge that occurred more than two weeks ago in mid-June that prompted a recovery from the pullback to 1.6700-area support. Now pushing higher above 1.7000, the currency pair could soon be poised to breakout towards a new long-term high.
If GBP/USD can maintain its strength above the key 1.7000 level, which is in the midst of potentially transforming into support rather than its previous role as resistance, a major upside resistance target resides around the 1.7250 resistance level. A failure to stay above 1.7000 could see the currency pair fall back towards the key 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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