GBP/USD flirting with highs near 1.3410

Pablo Piovano FXStreet

The rally in Sterling remains everything but abated today, now pushing GBP/USD to record fresh cycle tops beyond 1.3400 the figure.

GBP/USD boosted by BoE

The pair is extending the upside beyond the 1.3400 handle - levels last seen in September 2016 – following yesterday’s bullish ‘outside day’ candle, opening the door at the same time for a potential visit to the key 1.3440/50 band (monthly high September 2016).

The sentiment around GBP revived in response to a hawkish message from the Bank of England at yesterday’s meeting, where the central bank suggested that less monetary stimulus could be appropriate in the upcoming months.

In light of the event, strategists at TD Securities argued “We expect the Bank of England to hike Bank Rate 25bps in November, and again by May 2018, most likely at its February meeting. Beyond this, policy again reverts to “wait and see” mode as the MPC assesses the effects of Brexit uncertainty on the economy”.

Nothing scheduled data wise in the UK today, whereas retail sales and the consumer sentiment gauge will be the salient points in the US docket.

GBP/USD levels to consider

As of writing the pair is up 0.09% at 1.3409 and a break above 1.3447 (high Sep.6 2016) would aim for 1.3481 (high Jul.15 2016) and finally 1.3500 (psychological handle). On the flip side, the immediate support lines up at 1.3177 (10-day sma) seconded by 1.3167 (low Sep.14) and then 1.3025 (21-day sma).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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