June 30, 2014 – GBP/USD (daily chart) has continued its bullish momentum as it re-approaches its new five-year high of 1.7062 that was just established little more than a week ago. Not since late 2008 has this currency pair reached such lofty highs. Overall, since its low around 1.4800 in July of last year, GBP/USD has risen by more than 15% in less than a year, far outperforming its major currency pair counterparts.
The current highs above the key 1.7000 level were the result of a pronounced surge that occurred more than two weeks ago in mid-June that prompted a recovery from the pullback to 1.6700-area support. Now pushing higher above 1.7000, the currency pair could soon be poised to breakout towards a new long-term high.
If GBP/USD can maintain its strength above the key 1.7000 level, which is in the midst of potentially transforming into support rather than its previous role as resistance, a major upside resistance target resides around the 1.7250 resistance level. A failure to stay above 1.7000 could see the currency pair fall back towards the key 1.6700 support level.
James Chen, CMT
Chief Technical Strategist
City Index Group
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