GBPUSD
The GBP to USD (GBPUSD) is about to do something it did last in January 2018. The pair is about to rise for four consecutive weeks as the market remains sceptic about the greenback. It is trading at 1.3368, which is closer to its highest level since August.
There are two primary reasons why the sterling is soaring against the US dollar. First, while differences between the European Union and the United Kingdom remain, analysts are still optimistic about a deal. Furthermore, the EU and the UK are both facing the likelihood of a double-dip recession. As such, it will be unlikely that they will be open to make a bad situation worse.
Second, the GBPUSD is rising because of the weaker dollar. The greenback has lost favour among investors who are now predicting a less chaotic period with Biden as president and with a Covid vaccine almost ready. The question is, can the rally of the GBP/USD last?
Turning to the daily chart, we see that the GBPUSD is trading at 1.3368, which is still above the ascending trendline that connects the lowest levels in May, July, September, and November. This is a strong indicator that bulls remain in control. Another evidence is that the pair is above the dynamic support of the 25-day moving averages.
Therefore, in the near term, I predict that the pair will continue rising, with the next resistance being at 1.3480, the highest level on September 1.
