GBP/USD: where’s the ceiling?
GBP/USD reached $1.6117 before returning to $1.6090. UBS points out that sterling bounced from the critical support at $1.5894, reinforcing the bullish picture. Resistance is at $1.6122 ahead of $1.6260.
Citibank thinks that GBP strength may persist as the Bank of England will likely keep its QE scale unchanged. In their view, GBP/USD may test higher to $1.6260 gradually, with strong support at 55-day MA at $1.5932. JP Morgan expects the upside to be limited by $1.6161/74.
Note that the BoE’s Governor Mark Carney will present new quarterly forecasts on Wednesday, Nov. 13 and many analysts expect the central bank to raise its economic estimate. There’s, however, already a lot of positive news priced in the pair’s rate, so analysts at Rabobank International don’t think that it will be difficult for pound to sustain gains much above $1.6100. Bank of Tokyo-Mitsubishi agrees with this latter idea.
Chart. Daily GBP/USD