The GBPUSD price is on course for a fourth consecutive daily gain against the Dollar. However, as Sterling’s outlook improves, $1.4250 could be achievable.
The GBPUSD pair is last trading at $1.3958, higher by $0.0056 (+0.40%).
The pound has staged an impressive comeback over the last 9 trading days. Worries over the Covid-19 Delta variant earlier this month had forced the GBPUSD price lower as the US dollar caught a safe-haven bid.
However, after bottoming out at $1.3572 on the 20th, the Pound has rallied almost 3% against its US counterpart. And if the current bullish momentum continues, Sterling may soon clear the psychological resistance at 1.4000. Should that happen, it could target June’s, three -year high.
Looking at the daily chart, we see that GBPUSd has climbed above the 50-day moving average at $1.3952 and the 100-day at $1.3923. The pound is also well clear of the important 200 DMA, which sits below the market at $1.3736.
However, both the 50 and 100 are within today’s range, and until the daily candle is completed, we won’t have confirmation of clearance.
If the GBPUSD price finishes the day above $1.3952, the obvious target is $1.4000. Aside from its status as a round big figure, it has proved a good support and resistance level this year.
Therefore, if cable convincingly clears $1.4000 on a closing basis, the bulls will aim for May’s $1.4250 high.
This bullish view is dependent on the price closing above the 50 and 100-day moving averages. A failure to breach this support suggests the bullish momentum is fading and would invalidate the immediate positive outlook.