- Pound's rebound from 1.3414 has extended to one-week highs at 1.3640 so far.
- The sterling appreciates on hopes of a BoE's interest rate hike.
- GBP/USD's current recovery, to cap at 1.3658/75.
The sterling maintains a bid tone for the fourth consecutive day on Tuesday. The pair’s recovery from year-to-date lows near 1.3400 last week has extended beyond 1.3600, reaching session highs at 1.3640 so far.
GBP appreciates on BoE’s rate hike expectations
The pound has brushed off the weak tone that sent the pair plunging in late September, as the investors turned their focus from the fuel shortages and supply chain restrictions in the UK to the expectations that the Bank of England could be the first major central bank to hike raes after the COVID-19 crisis.
On the macroeconomic domain, Septembers’ UK services sector’s activity has been revised upwards to 55.4 from preliminary estimations of 54.6. The sector's prices, however, have shown their largest increase on record, with new orders plunging amid shortages of supply and staff that might deteriorate the sectors’ growth prospects.
GBP/USD: Resistance at 1.3658/75 expected to limit upside attempts – Credit Suisse
Technical Analysts at Credit Suisse observe the current rebound as corrective and expect the pair to be capped at 1.3658/75: “Resistance remains seen at the 13-day exponential average and price resistance at 1.3658/75, which ideally still caps. A close above here would suggest the recovery can extend further to what we look to be tougher resistance at the recent reaction high and 55-day average at 1.3752/75.”
Technical levels to watch
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