GBP/USD Forecast: Pound keeps rallying
|Pound's rally extends this Wednesday, with the pair up to 1.3234, a fresh 3-week high against its American rival. There was no catalyst behind the rally, but strong demand for the depressed currency in London. In fact, the rally stalled after the release of the BBA's borrowing figures, the first gathered after the EU referendum. According to the release, mortgage approvals came in below expected, at 37.662K, and below previous revised 39.763K, but there's no significant different from readings pre-Brexit.
European equities are sharply higher, but the Footsie lags, due to a strong GBP. Also, helping the recovery is a bounce in oil prices after falling during the past Asian session.
Now trading around 1.3230, the 4 hours chart present a strong upward potential, given that the price is accelerating above its 200 EMA for the first time since the Brexit, while indicators head strongly higher, nearing overbought territory.
There's an intraday resistance at 1.3260, with further gains beyond the level favoring an upward continuation up to 1.3320, the 23.6% retracement of the post-Brexit slump and a major static resistance level. The immediate support on the other hand, comes as 1.3210, Tuesday's high, with a break below it signaling a probable bearish correction towards the 1.3160 region. Nevertheless, buying interest is expected to surge around this last.
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