GBP/USD looking for a new high to retest the upper side of a wedge
Pound keeps moving higher as intraday sentiment turned against the US currency as US stocks indexes keep trading at ATH. Technically speaking, cable made only a three wave drop within a corrective channel that found a support at former wave four, near 1.3622. Intraday rise is sharp, looks like an impulse that is now also trying to break through the upper trendline resistance so it appears that bulls are ready to retest 1.3744 highs, the upper side of a 4h wedge.
GBP/USD back above 1.3700 as risk appetite recovers
GBP/USD was on the back foot in the early part of the European trading session, dropping to lows of just above the 1.3600 level at one point. However, having bounced firmly from its 21-day moving average at 1.31115, the pair has spent the last few hours on the front foot and is currently now pushing to fresh highs of the week above 1.3720. Highs of the year are not too far off at just under the 1.3750 mark, an area the bulls will be targeting. GBP/USD appears to be benefitting from broad US dollar weakness rather than any GBP specific strength or positive UK fundamental developments.
Risk appetite weighs on the US dollar
Risk appetite has taken a significant turn for the better since the European market open, after a downbeat Asia Pacific session, weighing on the USD and lifting GBP/USD. US stocks opened in the green, European equities have for the most part erased Monday’s losses, crude oil markets are higher and bond yields are higher on both sides of the Atlantic. In FX markets, safe-haven currencies JPY, CHF and USD are the laggards whilst the more risk-sensitive currencies are in the lead.
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