This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
GBP/USD sets tone for bullish phase
Yesterday saw GBP/USD break above an ascending trendline from April and with it created a new high, punching above the 6 July peak of $1.563. Ultimately, these two moves point to a clear uptrend in play and thus the price action seen last week has been confirmed as a bottom.
Despite the likeliness of some form of pullback in the near-term, I am bullish and would expect to see a move back towards $1.593 by the end of next week. Any retracement lower would give good buying opportunities, with the main support levels I am watching coming at the ascending trendline (currently $1.5636), $1.559 and $1.5552.
Be aware that the UK jobs report will being released today and thus there is a chance of major fundamentally-driven price action.