GBP Gained 1.9% Last Week: Can That Rally Be Sustained?
|S1: $1.3168||R1: $1.3224|
|S2: $1.3116||R2: $1.3251|
|S3: $1.3082||R3: $1.3267|
Sterling added +1.9% or some 287 pips vs the US Dollar last week and traded back to as high as $1.3224. Whilst the dollar was undeniably weak, Sterling also made headway against the Euro, Scandis & the Rand. This suggests that the strength in Pound was genuine and intrinsic. A busy calendar this week with the Bank of England’s meeting on Thursday, the highlight.
We posted four bullish candles in a row last week, sweeping through our resistances to trade up to $1.3224 on Friday. Though we couldn’t repeat that in Monday’s trade. RSI 14 on the daily chart has reached 70 and I note the three high wave candles posted in early August, from which Cable ultimately rejected a high of $1.3267. A pullback from last week’s close seems probable.
With current macro issues said to be reflected in Sterling’s valuation, attention turns to the calendar which contains UK Inflation data (Tuesday), Unemployment and Earnings data (Wednesday) and the Bank of England interest rate meeting (Thursday). All of which will be crucial in determining investor sentiment towards the Pound and Cable over the medium term.