GBP/USD Still A Sell-On-Rallies
By Kira Iukhtenko
Bulls tried to push the British pound higher last week and succeeded: the pair reached 1.4440 at its weekly highs. The market conditions still remain oversold, so we see potential for more upside next week. The March bullish engulfing candle on the monthly chart also points to more growth potential of the British pound.
However, the 1.4500/50 area remains a strong resistance. This is the neckline of the potential inverse head-and-shoulders pattern. We do not see any market drivers that could push the pair above this area in the coming weeks. In a long term we maintain a bearish view for the cable, targeting 1.3500 by June.
As for the economic calendar for the new week, watch the preliminary UK GDP on Wednesday. According to the economic indicators we’ve already seen, UK economic growth softened over the first three months of the year. Data shows that weaker domestic demand has hit the manufacturing and services sectors. The net lending to individual figures will be released on Friday.