GBP/USD: headed back to 1.50?

GBP/USD: looking in at Jan 25th post-Brexit referendum highs, where next?
GBP/USD: Syria threat shrugged off, BoE in focus.

Ross J Burland FXStreet

GBP/USD was handed over to the US open up +0.45% in the European session after rising from 1.4238 to a high of 1.4313. Currently, GBP/USD is trading at 1.4329, up 0.64% on the day, having posted a daily high at 1.4339 and low at 1.4232.

British Prime Minister Theresa May has been addressing the UK parliament

The British Prime Minister Theresa May has been addressing the UK parliament after joining France and the US in airstrikes against Syria in a military operation that followed allegations of a chemical weapons attack in the town of Douma. Russia has said that if there is another Western attack on Syria, there will be 'global 'chaos'.

Besides the geopolitical uncertainties, the main focus stays with the Central Banks and the potential for a rate hike from the BoE as soon as next month. This sentiment is giving the pound the edge while the DXY is weaker in its own right with broad-based dollar weakness and stronger commodities to start the week in European and US markets. There is also so M&E news in the background underpinning the pound with Shire selling its oncology business to Servier for $2.4bln. Also, with the most recent Brexit news more positive, cable has moved in on the post-Brexit referendum day high of 1.4346 with the latest high being 1.4337 so far.

GBP/USD levels

Bulls need to keep above the 200-W SMA 1.4245 that guards the Jan 2018 high of 1.4346. The post-Brexit highs by 1.5022 come thereafter on the very wide. "The GBP undertone is technically constructive and we think a push through the low 1.43s to a new cycle high will facilitate a push on to the mid 1.44 area fairly quickly. Support is 1.4230," analysts at Scotiabank noted. The psychological target comes as the 1.40 handle that guards 1.3960 and the four-month uptrend line at 1.3844.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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