Will GBP/USD Hit 1.25?

Will GBP/USD Hit 1.25?

Will GBP/USD Hit 1.25?

Over the past week we have seen consistent gains in GBP/USD – part of it was driven by U.S. dollar weakness but the Bank of England’s unexpected hawkishness also contributed to the move. As we start the new week, GBP/USD traded above 1.24 and many investors are wondering if the currency pair will extend to 1.25. If the U.K. government doesn’t trigger Article 50 and this week’s inflation and retail sales reports surprise to the upside, GBP/USD could reach that level. However if Article 50 is triggered and/or Federal Reserve officials suggest that they could tighten in June, the currency pair could give up its gains quickly and aggressively. Sterling traders should be vigilant as this could be a big week for GBP/USD.

Technically GBP/USD is still struggling to break 1.24. It has weaved above and below this key level but has yet to break above it in a meaningful way. If GBP/USD breaks above 1.2440 we should see 1.2500 and possibly even 1.2550. However it if fails at 1.2400, a move back down to 1.23 in the near term and 1.22 if Article 50 is triggered this week

Chart Of The Day

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