The GBP/USD pair rose on Wednesday as traders dumped the USD and bought the GBP, obtensively based upon the higher than expected inflation numbers out of the UK on Monday. This signals that the Bank of England may not be looking to do more Quantitative Easing, and as such – the Pound should rise.
The 1.65 level has been broken, and more importantly held above that level. Because of this, we see the pair attempting a move to 1.68 before it runs into the massive 1.68 to 1.70 resistance level. The breaking to the upside of the Wednesday candle is a buy signal in our opinion. 1.65 should prove to be support. If it gives way – this pair falls.
Written by FX Empire