GBP/USD rallied today, after the BoE surprisingly hiked interest rates for the first time since the outbreak of the coronavirus pandemic. The rate broke the upper bound of the sideways range it’s been trading within since December 3rd, to hit resistance near the high of November 30th, at around 1.3370. With that in mind, we believe that the short-term outlook as turned positive for now.
A break above 1.3370 could pave the way towards the high of November 22nd, at 1.3450, where another break could target the 1.3510 area, which prevented the rate from moving further north between November 18th and 19th. If that zone is not able to withstand the pressure either, then its break may pave the way towards the 1.3580/1.3607 area, marked by the highs of November 8th and 9th respectively.
Shifting attention to our short-term oscillators, we see that the RSI moved higher and now looks able to move above its 70 line, while the MACD lies above both its zero and trigger lines. Both indicators detect strong upside speed and support the notion for further advances in this exchange rate.
The outlook could turn negative again upon a break below the lower end of the range, at around 1.3170. This will confirm a forthcoming lower low on the 4-hour and daily charts and may encourage the bears to push the action towards the 1.3130, marked by the low of December 11th, 2020. A break lower could carry larger bearish implications, perhaps paving the way towards the 1.3060 zone, marked by the inside swing high of October 28th, where another dip could see scope for declines towards the low of November 5th, 2020.
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