FXStreet (Bali) - GBP/USD confirmed a major technical breakout by closing above the 1.70 round number, a milestone that reaffirms the firm progress of the bullish trend, ending NY at 1.70380 after hitting a 5 1/2 yeah high at 1.7064.
Once the FOMC statement (main risk this week - USD negative) and UK retail sales (positive) were out of the way, traders finally saw the opportunity to reflect in GBP/USD price chart what this week has been perceived as a growing divergence between the BoE and the Fed, with the former now expected to hike rates significantly before than its US counter-part.
Jim Langlands, Founder at FXCharts, notes: "The way seems to be opening up for a strong move higher in Sterling and there really is not an awful lot of resistance ahead of 1.7300 – the 50% pivot of the long term move from 2.1160/1.3547."
Jim adds: "Beyond that, there is not a great deal to stop Cable heading to the August 2008 high, which is not to be seen until 1.7516, so it could be a wild ride if/when it does decide to carry on. Don’t get too excited – yet."