GBP/USD held up above the June trend line support which is now near a confluence of other key support levels –55-WMA (1.5806) and 200-WMA (1.5783). While the price remains below the September trendline resistance, there is a growing probability for the upside to break out of the current ceiling as is signaled by favourable stochastics on the weeklies. GBP/USD may well first retest its 100-WMA of 1.5940s before mounting a renewed break above 1.6020 and onto 1.6160. The daily chart also presents its share of confluence levels of support, via the 100-DMA (1.5902) and 200-DMA (1.5858). These are expected to hold and present considerable sources of fresh bids for sterling.
This week’s revised report on Q3 GDP and Nov CBI survey on sales orders will show its share of volatility on the pair.