GBP/USD has been on a bullish tear in November, rising nearly 4.5% since the beginning of the month. After Tuesday's gains, the pair has reached its best level since late August, but has been unable to reclaim the 61.8% Fibonacci retracement of the July/October slump (1.2720). If this ceiling holds, the upside momentum could run out of steam, paving the way for a drop towards 1.2590, followed by 1.2460.
In the event of a clear break above 1.2720, sentiment on sterling is likely to improve, unleashing animal spirits that could propel a potential upward move towards 1.2850. On further strength, buying interest could accelerate, opening the door to a climb toward the 1.3000 handle. Although the bullish case for GBP/USD is strong, it is important to exercise caution as the pair is about to enter overbought territory
In the event of a clear break above 1.2720, sentiment on sterling is likely to improve, unleashing animal spirits that could propel a potential upward move towards 1.2850. On further strength, buying interest could accelerate, opening the door to a climb toward the 1.3000 handle. Although the bullish case for GBP/USD is strong, it is important to exercise caution as the pair is about to enter overbought territory
