GBP/USD surges through 1.3920 supply zone, hits 2-week tops

Haresh Menghani FXStreet

• USD weighed down by unimpressive CPI/US political news.
• OBR upgrades UK GDP forecast for 2018 and underpins GBP.
• A follow-through buying needed to confirm a bullish breakout.

The GBP/USD pair caught some strong bids during the early NA session and rallied around 80-pips to 2-week tops.

Against the backdrop of today's unimpressive US inflation figures, the latest US political development, wherein the US President Donald Trump fired the US Secretary of State Rex Tillerson, prompted some aggressive US Dollar selling and supportive the pair's upsurge.

The British Pound was further boosted by the latest Office for Budget Responsibility (OBR's) upgraded UK economic growth forecast for 2018. The up-move took along big stops placed near the 1.3910-20 region and further collaborated towards accelerating the pair's up-move.

It, however, remains to be seen if the up-move is backed by genuine buying interest, suggesting a fresh bullish break-out, or turns to be a stop run, a possible fake-out, amid persistent worries around impending Brexit talks.

Technical levels to watch

A follow-through buying interest would reaffirm a fresh bullish breakout and should continue boosting the pair further towards reclaiming the key 1.40 psychological mark. On the flip side, the 1.3920-10 region now becomes an immediate support to defend, which if broken could accelerate the fall back towards 1.3880 horizontal support.

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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