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