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GBP/USD: sideways trade

By Kira Iukhtenko, FX BAZOOKA analyst

Last week’s GBP/USD rapid rebound from $1.5850 and a break of the key resistance of $1.6115 on Friday confirm that the short-term bearish view was wrong. However, it is too early to speak about the resumption of growth: we remain neutral for the pound in the medium term.

Take a look at the weekly chart: the sterling is consolidating below the 2009-2013 resistance (currently around $1.6340). The pair left the “summer” bullish channel and is basically trading sideways in the $1.5850/1.6260 range. 

 

Chart 1. Weekly GBP/USD

In the near term GBP has enough room to strengthen to $1.6200/60, but this area still has a large potential to become a top.

Resistance: $1.6150, $1.6200, $1.6160, $1.6350

Support: $1.6000/5990, $1.5950, $1.5900, $1.5850

Chart 2. Daily GBP/USD

GBP
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