The GBP/USD is approaching a quarterly peak as market emphasis is currently on a test of 1.2080 for the coming sessions.
If the bears fail to break this level of support, then a meaningful correction to the upside will be on the cards. The GBP/USD pair is still on the backside of the late September rally’s trendline where it managed to gain 20% in the quarter so far.
The Pound Sterling is on track for its best quarter in more than 13 years. However, However, GBP/USD remains about 10% lower for the year and the following analysis is going to be through the eyes of the bears.
GBP/USD was last -0.6% having fluctuated in and out of the positive territory on Tuesday, driven by volatility due to the Bank of Japan’s (BoJ) surprise tweak to its bond yield control. The BoJ is now allowing long-term interest rates to rise more in a move aimed at easing some of the costs of prolonged monetary stimulus.
This means that the Japanese could be looking to bring assets home, sinking all ships vs. the yen on the forex board. However, the price is now settled back within the volatility between 1.2223 and 1.2084 but it is coiled into a potential breakout peak below 1.2150.
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