‘The rally could stall here this week but if GBP/USD breaks above 1.2400 on Friday, we could see an extension to 1.25.’ – Kathy Lien, BK Asset Management (based on PoundSterlingLive)
The British Pound was able to post more gains against the US Dollar on Thursday, ultimately closing at a fresh two-week high of 1.2363. The Cable’s volatility was limited by the resistance around 1.2370, formed by the weekly R2 and the 55-day SMA. This tough area is likely to prevent the Sterling from appreciating again today, being a minor setback on the pair’s path towards retesting the down-trend around 1.2450. Nevertheless, a bearish development is anticipated today, but with the exchange rate retaining position above the 1.23 mark. Technical studies are now able to confirm the possibility of the negative for the Pound outcome.
Market sentiment remains strongly bullish, namely at 68%, but the number of purchase orders declined from 65 to 53% over the day.