GBP/USD remains well bid
The pair now retraced some ground from previous 2013 highs to the 1.6370/65 area, although the buying interest surrounding the GBP remains intact. The strong recovery in the British economy in combination with expectations of a sooner-than-estimated rate hike by the BoE, plus the hawkish tone from this week’s Financial Stability Report would be bolstering the bullish momentum in GBO, leaving the door open for further strength in the upcoming sessions. According to BabyPips.com, “GBP/USD just made an upside break from its 300-pip range, which suggests that further rallies could be in the cards. According to our School lesson on rectangles, the resulting breakout could be of the same height as the previous range so Cable might be aiming for the 1.6600 level next. Be careful though, as stochastic is already deep in the overbought area!”.
GBP/USD critical levels
The pair is now up 0.18% at 1.6373 with the initial resistance at 1.6400 (psychological level) and then 1.6421 (high Aug.30 2011). On the flip side, a breakdown of 1.6277 (low Nov.28) would aim for 1.6198 (low Nov.27) and finally 1.6185 (MA10d).
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