Nick Nasad
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GBP/USD - What Happens Next With Cable's Range?

The GBP/USD daily chart is an interesting one as we have certainly established a well defined range between 1.59 and 16250.

  • We currently hover near the bottom of that range, and the question is what happens next?
  • One scenario is that cable remains within the range, using the support level as a starting point for a rally towards the resistance. This would require strong data from the UK (there's plenty on the fundamental docket with inflation, employment, retail sales and the BOE inflation report this week.)
  • If the UK data is disappointing then a break of the 1.59 level would be an immensely important technical signal, as we would have a double top pattern, and the potential for a measured move amounting to 250 pips (the range from top to bottom), though there is an important pivot around the 1.57 handle that could provide support beforehand. 
  • Therefore, the GBP/USD is likely to be the pair to watch as this week progresses.