GBP/USD striving to push towards higher highs
James Chen January 10, 2014 8:46 PM
<p>GBP/USD (daily chart) has made a modest pullback since the beginning of 2014 after hitting a 2+ year high at 1.6602 on the first day […]</p>
GBP/USD (daily chart) has made a modest pullback since the beginning of 2014 after hitting a 2+ year high at 1.6602 on the first day of the year. That high was reached in the midst of an exceptionally strong and steep bullish trend extending back from the July 2013 low around the 1.4800 level. This bullish trend, which is currently still intact, represents a full 12% rise within six months.
Supporting this bullishness are both a key uptrend line extending back from the noted 1.4800-area low as well as two key moving averages – the 50-day and 200-day. Both averages are pointing unmistakably to the upside, with the 50-day well above the 200-day, a condition that has been in place since September 2013.
The technical outlook for GBP/USD continues to carry a bullish bias moving further into 2014, and could potentially continue to reach for higher highs. The near-term upside resistance target resides around the 1.6750 level, which would further extend the bullish trend, and then potentially on towards the 1.7000 resistance level. Key downside support tentatively resides around the well-tested 1.6300 price region. Any sustained breakdown below that support level could signal a deterioration of the current bullish trend.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.