GBP/USD outlook: Extended rally focuses key barriers

Slobodan Drvenica Windsor Brokers

GBP/USD

Cable extends advance into fourth consecutive day and hits new three-week high on Thursday, up 1.4% since Monday.
Strong risk sentiment and optimism over EU/UK trade talks continues to boost sterling, with Wednesday’s close above 1.2598 (Fibo 61.8% of 1.2813/1.2251) generating bullish signal.
Today’s extension higher approaches strong barriers at 1.2680/87 (Fibo 76.4% / 200DMA), break of which would open way towards weekly cloud top (1.2736) and unmask 10 June peak at 1.2813.
Rising bullish momentum on daily chart supports the advance, but overbought stochastic warns that bulls may take a breather and consolidate before resuming through 200DMA.
Dip-buying above 1.2606/1.2598 (broken 55WMA / Fibo 61.8%) is seen as favored scenario, with weekly close above these levels needed to confirm strong bullish stance.

Res: 1.2666; 1.2687; 1.2736; 1.2753
Sup: 1.2625; 1.2598; 1.2556; 1.2532

Interested in GBP/USD technicals? Check out the key levels

1. R3 1.2767
2. R2 1.2695
3. R1 1.2653
PP 1.2581
1. S1 1.2538
2. S2 1.2466
3. S3 1.2424

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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