The weak US retail sales gave GBP/USD the last push and it reached levels last seen sinc e May 2011 – 2 years and 9 months.
At 1.6673, the new peak is currently only 5 pips above the high seen in January, and the break awaits confirmation. If the pair retreats from this level, we will have a clear double top in GBP/USD.
The bigger move higher began with the enhanced forward guidance that the Bank of England presented. Within the new rhetoric of keeping low rates until the output gap is closed, the central bank also hinted that rates would probably rises when markets expect them to rise: the second quarter of 2015. This is different from the statement about a hike in 2016.
This is how it looks on the weekly chart:
The big move that we saw this week sent the pair through 1.6618, which was a peak in late 2011 and now turns into support. The next big line is 1.6750, which is still far. That was the May 2011 peak. Beyond this level, we have 1.6877, which was a peak in 2009.
As aforementioned, the break still awaits confirmation. For more levels, events and analysis, see the Sterling dollar forecast.
