The GBP/USD pair has outstripped all levels back to the first half of 2018 as the pound added slightly to its gains of the past four months last week. Joseph Trevisani, an Analyst at FXStreet, looks to a new top within the week followed by profit-taking and then a return to positive territory.
Key quotes
“The sterling faces a considerable technical test ahead as it approaches substantial resistance at 1.3770. The strength of this line probably ensures several technical attempts before success unless it is negated by a meaningful fundamental development.”
“The Bank of England policy vote will produce no change and though markets will look to Governor Andrew Bailey for direction he is unlikely to provide any more indication than his colleague in Washington did. The trend is higher but could be blunted if the dollar regains a stronger bid from the risk-averse trade or an improved domestic economy.”
“The several closing rates over the past week around 1.3740 are references to the resistance at 1.3770 and above rather than a block of their own. The rising channels are intact and the upper border of the inner and steeper formation enters the resistance bands and is protected by them. It is likely that a move higher from here will need a positive fundamental or economic development. The longer the pound lingers at these highs without penetrating the resistance band above the greater the chance of a profit-taking fall. Such would not change the trend, merely delay the test.”
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