GBP/USD Forecast: above 1.3000. Now what?
|The British Pound skyrocketed through 1.3000 against the greenback, finally breaking higher after a three-week consolidative range, amid much better-than-expected UK retail sales. In April, sales surged by 2.3% monthly basis, beating the 1.0% forecast, while yearly basis the advance was of 4.0%, doubling market's expectations. Net of fuel, the numbers were also way above expected while March figures were revised modestly higher.
The GBP/USD peaked at 1.3045, level last seen late September 2016, holding nearby after the dust settled, something that has strong bullish implications, particularly as investors continue to drop US-related assets. Further gains, however, could be limited when compared to other major pairs, amid persistent cautions around the Pound ahead of local elections.
Nevertheless and from a technical point of view, the pair is biased higher, given that in the 4 hours chart technical indicators have accelerated north within positive territory, now at fresh monthly highs, whilst the 20 SMA gains upward strength below the current price, after providing support for most of this week.
There's a strong static resistance area between the daily high and 1.3060, as the pair topped/bottomed around it multiple times in the immediate months following the Brexit referendum. If the pair breaks through this last, the 1.3110/30 region comes as the next bullish target.
Below 1.2990 on the other hand, the pair could ease back to the 1.2930/40 area, its comfort zone for most of this week.
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