GBP/USD is losing momentum
“British pound can’t keep this up forever,” writes the WSJ contributor. GBP/USD reached $1.6180 today, the highest level since early January. The main drivers of the pound were optimism about the UK economy and a massive deal between Verizon Communications and Vodafone.
Despite good growth figures, British current-account and trade deficit widened. The pair has lost upward momentum by the end of September. Daily RSI is overbought, while there’s divergence at H4 MACD and RSI. Elliot Wave analysis also indicates that sterling’s close to turning down, at least for a sizeable correction. Large end-of-month GBP buying against the EUR is also expected and if this cannot shift the cable higher then we really are close to a top.
Resistance is at $1.6180 and $1.6200. Support is at $1.6130, $1.6100 and 1.6055 before $1.6000 and $1.5965.
Chart. Daily GBP/USD