GBPUSD: Cable surges amid dollar weakness

The US dollar came under renewed selling pressure on Tuesday, which lifted many USD pairs and the so-called cable jumped 0.8% to trade at around 1.3165 during the US session.

There seem to be no resistances tills this month’s highs in the 1.3250 area, thus bulls could be in charge until this level is reached. From the intraday perspective, some profit taking might be at the 1.32 psychological level.

If the 1.3250 resistance is broken and sterling closes above this level on a daily basis, the medium-term trend might change to bullish again, targeting the 1.35 zone.

Alternatively, the GBPUSD pair needs to remain above 1.3150, which is the short-term support. While above it, the immediate outlook appears bullish.

However, if the Pound falls below this level, stop-losses of long positions could be hit, which might drag the pair further lower toward 1.31. As long as the pair remains stuck to 1.31, we could see choppy trading.

As we previously said, the Fed is printing massive amounts of money into the financial markets, while the Bank of England is not so “crazy”, which should lead to higher prices in the GBPUSD pair.

 
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