FBS: outlook for GBP/USD
GBP/USD is consolidating in the $1.5960/30 area. The pair has started this week with a gap. As the market still expects the Fed to taper bond purchases this week and GBP is overbought in the short term, we expect this gap to be filled – pound will correct to $1.5870/30 (bottom of the gap, middle Bollinger band on H4). As the general pound trend is bullish (the pair has settled above June highs), we expect the bulls to keep pressure on the upside. Sterling will test $1.5980 and possibly the psychological resistance at $1.6000. Resistance at $1.6035 and $1.6050 should be a ceiling in the coming sessions. We recommend buying GBP on the dips above $1.5830.
Chart. H4 GBP/USD