Last week the Sterling, or GBP/USD, broke out of the box it was trading in between 1.5450 + 1.5750 for the past 90+ days. The pair traded as high as 1.59114 before pulling back to previous resistance, now support at 1.5775 and printing a bullish candle yesterday that kissed the previous zone with a low of 1.5753 before closing at 1.5824 for the day. This is a common continuation pattern known as a 'last kiss' or 'retouch' that suggests that the pair will continue higher. There is pretty heavy 'traffic' or previous consolidation between 1.5825 & 1.5900 that the pair will have to work through, but a daily close above 1.5915 will confirm the bullish trend continuation. 1.5915 will be the next major resistance level, above that we have the Monthly R2 at 1.5982 & Weekly R2 at 1.6030. If the bullish momentum continues today, there is a good chance we will see 1.6000 within the next week barring any major fundamental hurdles. With that, keep in mind that we have Prelim GDP & Pending Home sales out of the USA today which could potentially boost the Greenback and send the GBP/USD lower as well as the Jackson Hole summit and Draghi's speech on Saturday. For now however, its a good plan to remain bullish on this pair.
Happy Trading