GBP/USD Extends Gains above 1.4600 Boosted by a Stronger Pound

GBP/USD Extends Gains above 1.4600 Boosted by a Stronger Pound

24 May 2016, 18:28
Roberto Jacobs
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GBP/USD Extends Gains above 1.4600 Boosted by a Stronger Pound

After making a correction from 1.4620 to 1.4580, GBP/USD resumed the upside and broke higher reaching a fresh daily high at 1.4637. The pair remains near the highs, almost 150 pips above yesterday’s closing price. If GBP/USD ends the day around current price it would be posting the second highest close since January.

Cable broke above Friday and Monday’s highs and now is looking to test last week top that lies at 1.4661. If it climbs further it would be trading at the strongest in three weeks and attention would turn again to the 1.4700 handle.

GBP extends gains across the board

During the last hours the pound hit fresh highs in the market; among majors is the best performer followed by the loonie and the US dollar. EUR/GBP is falling more than 100 pips, heading to 0.7600 while GBP/CHF trades at 3-month highs above 1.4500. In Wall Street, stocks are rising sharply with the Dow Jones up 1.25% and the Nasdaq 1.77%. In London, the FTSE 100 gained 1.35%.

Recent polls that showed a lead of “remain” ahead of the Brexit referendum and the testimony of Bank of England authorities at the Treasury Committee boosted the pound in the market.

Is 1.4800 on the radar?

According to analysts from Lloyds Bank, a break above 1.4675 would negate the short-term downside bias suggesting another test of the more important resistance in the 1.48-1.4950 region. “Medium-term we still believe the market should remain in a range between 1.4050/1.3980 (1.35 key below there) and the 1.48-1.4950 region”.


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