Forex Analysis : GBP/USD … Running out of steam
Sterling has significant resistance from 1.6350 to 1.6450, and even with a weak dollar we do not think GBP will be able to break out above this range.
• The week chart of GBP/USD looks tired and in need of some consolidation, if not a decent correction, but we assume it will not fall by much unless the unthinkable happens – the USD rebounds at very long last.
• GBP/USD closed just above its 240 hour average (1.6287) and has a VST breakdown point at 1.6270, from where 1.6220 is seen as the key level before things turn ugly and 1.6000 is confirmed as the retracement target for Sterling.
• If however Sterling manages to hold above 1.6260 this week it will be somewhat bullish and could see an attempt on the key band of resistance noted above – at 1.6350 to 1.6450.