The British Pound managed to trade higher recently against the US Dollar, and it looks like the GBPUSD pair may soon move above 1.2325.
GBPUSD Weekly Analysis – British Pound Eyeing Further Gains
· The British Pound traded higher, and gained pace above the 1.2250 resistance area versus the US Dollar.
· The GBPUSD pair broke a couple of important resistances on the way up like 1.2250 and 1.2280.
· The UK Construction PMI released by the Chartered Institute of Purchasing & Supply and Markit Economics today posted a rise from 52.3 to 52.6 in Oct 2016.
GBPUSD Technical Analysis
The British Pound enjoyed a decent upside move this week above the 1.2200 handle against the US Dollar. There is a clear bullish trend line formed on the 4-hours chart, which acted as a support at 1.2150, 1.2200 and 1.2230.
The pair during the recent upside move traded above a couple of important resistances like 1.2250 and 1.2280, clearing the way for a move above 1.2300.
It looks like the pair is heading towards the 1.236 extension from the last drop from the 1.2271 high to 1.2113 low. If there are any further gains, then a break of the 1.2325 resistance is also very likely in the short term.
Trade Idea – If you are looking to enter a buy trade, then consider it near the trend line support area with a stop of around 25 pips.
Today, the UK saw the UK Construction PMI release by the Chartered Institute of Purchasing & Supply and Markit Economics. The forecast was a decline from the last reading of 52.3 to 51.8 in Oct 2016. The result was better, as there was an increase from 52.3 to 52.6 in Oct 2016.
Commenting on the report, the Senior Economist at IHS Markit and author of the Markit/CIPS, Tim Moore, stated that the “UK construction sector has started the fourth quarter in a positive fashion, with the latest survey data revealing a moderate rebound from the downturn seen during the summer”.
Overall, the trend is positive for the British Pound, and if the current trend stays intact, the GBPUSD pair may break 1.2325 for further gains.