GBP/USD Outlook: Hawkish Comments On Rate Expectations Lift Pound But Bulls Need More Momentum

Technical analysis of Forex market

Cable jumped to the new two-week high (1.3673) in early Monday’s trading, lifted by hawkish comments from UK policymakers regarding earlier than expected rate hike, but gains were so far short-lived.

Fresh attempts to break above recent congestion and clear pivotal barriers at 1.3642/62 (20DMA/50% retracement of 1.3912/1.3411) showed initial signs of stall, but the sentiment remains positive and keeps the upside in focus. Broken Fibo 38.2% barrier (1.3603) reverted to solid support, following last Friday’s weekly close above and should protect the downside to keep bulls in play.

Firm break above 1.3662 to expose targets at 1.3721/50 (Fibo 61.8% of 1.3912/1.3411/Sep 23 lower top).

Favor dip-buying but caution on potential return and close below 1.3603 as this and risk drop below pivotal 10DMA (1.3564) and neutralize bulls.

Res: 1.3642, 1.3662, 1.3698, 1.3721.
Sup: 1.3603, 1.3583, 1.3564, 1.3543.