GBP/USD had climbed more than 15 cents last year. This data had come after a terrible previous year due to Brexit, but it has made its way up. Most of this climb has been on the side of the USD.
GBP/USD continued its climb throughout last year, and in September it reached a new high, at 1.3657. So far, this has been its height as a result of the Brexit referendum, so that is now the target for buyers.
The pair climbed above 1.36 last week, but just couldn’t reach the target. Yesterday, however, the US producer inflation report (PPI) was quite disappointing, and as a result the Buck took a beating, and GBP/USD surged. The surge is continuing today, and we’re heading for 1.3650-60 right now.
We’re crawling closer to 1.3650-60
We’re approximately 40 pips down now, and with the way things have been evolving recently, 40 pips doesn’t look like much.
So, should we try a short term or even a long term signal from that level if we get up there today?
I definitely would like to try a short term signal, because I think that there will be an initial rejection, which would be a good opportunity to grab some pips. The US CPI (consumer price index) will be released shortly, and that data may break any levels, and is much more important than yesterday's PPI report.
All timeframe charts are severely overbought in GBP/USD, so a pullback is due- let’s see the US CPI numbers before making a final decision.