The pair is up nearly 2% on the week, no thanks in part to some heavy dollar selling yesterday as traders finally picked a side after the Fed meeting. But the pound side of the equation itself is also faring quite well, with the currency bolstered by a hotter UK jobs report earlier this week here.
That is keeping bets for further BOE rate hikes alive and with markets still unsure about the Fed, we are seeing a bit of a divergence in fortunes for the dollar and pound. GBP/USD has now broken resistance from its May highs and even pushing above its 100-week moving average (red line):
GBP/USD weekly chart
That’s a big win for buyers and they are now targeting a push towards the 200-week moving average (blue line) at around 1.2872 next. The key resistance point after that will be the 1.3000 mark.
The technicals are certainly lining up well for buyers at the moment and with the dollar also softening elsewhere, perhaps there is scope for the run higher here to extend a little bit more.
The BOE will be the next key risk event for the pair in the week ahead but they are very much expected to deliver another rate hike, with a 25 bps move fully priced in at the moment.