The Pound continues to be the toast of bulls this Thursday, posting an aggressive move to the north to bring the pair within touching distance of the 1.4000 price level, as I predicted on Monday.
The 150-pip rally in the GBP/USD came after the USD’s rally over the previous two sessions faded. Further adding pressure to the greenback was the disappointing US Jobless Claims report. This scenario made a strong case for the GBP/USD to approach highs last seen nearly 3 years ago.
Also boosting the Pound is a REACT-1 January survey that indicates that the UK coronavirus pandemic is in a strong decline, pointing to the effectiveness of the lockdown. This also puts the Pound in a strong position to advance well above 1.4000.
Technical levels to Watch
The pair has retreated slightly off intraday highs, but is still 100 pips up and thus maintains the intraday violation of the 1.39484 resistance level. A break of this level allows the GBP/USD to push towards the 1.4000 psychological resistance level. The 26 February 2018 high at 1.40675 and the 1.41404 resistance level are the additional targets awaiting bulls north of 1.4000.
On the other hand, a rejection at 1.4000 followed by a pullback could allow the GBP/USD to target the 11 February 2021 high at 1.38616, with 1,37916 and 1.37025 forming additional support targets.
GBP/USD Daily Chart