The British Pound (GBP) surged against the US Dollar (USD) on Wednesday, propelled by hawkish remarks from Bank of England (BoE) Chief Economist Huw Pill. Pill cautioned against hasty policy changes based on single data points, reinforcing expectations of further monetary tightening.
Technical Outlook: Bullish Momentum Gains Steam
The GBP/USD pair rebounded sharply from recent lows, with buyers regaining control and pushing the exchange rate above 1.2800. Technical indicators like the Relative Strength Index (RSI) confirm the bullish momentum, suggesting a potential test of year-to-date (YTD) highs.
Key resistance levels to watch include the June 12th high at 1.2861, followed by the YTD high at 1.2894. A decisive break above these levels could open the door to further gains, targeting 1.2900 and potentially even 1.3000.
Conversely, a shift in sentiment could see the pair retreat below 1.2800, with initial support found at the confluence of two trendlines around 1.2755/70. A breach below this level could trigger a deeper correction towards the 50-day moving average (DMA) at 1.2690. A major trend reversal would only occur if the GBP/USD falls below the June 27th cycle low of 1.2612.
Key Points:
- GBP/USD rallies on hawkish BoE commentary
- Bullish momentum supports potential test of YTD highs
- Key resistance levels: 1.2861, 1.2894, 1.2900, 1.3000
- Key support levels: 1.2800, 1.2755/70, 1.2690, 1.2612
