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Jan 13 - 05:55 AM

GBP/USD - COMMENT-Bulls Can Win Big If Sterling Clears Resistance

By Peter Stoneham  —  Jan 13 - 04:23 AM

The 1.3703 January high stands in the way of further GBP/USD gains, but the hurdle is there for the taking and major prizes for longs begin to enter the short- to medium-term picture on a break.

Federal Reserve policy views and strong 10-year UST auction have taken the wind out of the dollar while the BoE has curbed negative rate expectations. nN9N2GC01EnL8N2JN1YS

Sterling has little resistance until the April 2018 highs around 1.4370-80.
That was the major drop-off point for the decline to September 2019 lows of 1.1959.

Monthly action is beginning to rein in the cloud top and 100-month moving average, 1.4068 and 1.4164 respectively.

A long-term Fibonacci retracement level at 1.3714 joins the 1.3703 January high and the next level, taken off the 2.1162 to 1.1413 November 2007 to March 2020 drop, provides a three- to six-month objective at 1.5137.

A weekly cloud twist next week at 1.2464-1.2510 might slow the pound's progress, but it will take a fall below 1.3190 to negate the underlying bull trend.

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GBP/USD monthly Ichimoku chart: Click here

Source:
Refinitiv IFR Research/Market Commentary

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