GBP/USD: Bullish channel breakout and overbought conditions favor buying dip – BofA

Financial institution of America World Analysis discusses GBP/USD technical outlook and likes shopping for dips in Q1.

“In late November and December we preferred shopping for GBP at 1.32 for a
rally to the 1.35s attributable to quite a lot of technical situations. Since then
GBP/USD has rallied and broke out above the channel with sturdy momentum
to substantiate the break. Nevertheless the development turned down from resistance at
the 200d SMA as overbought situations start to appropriate,” BofA notes.

“The weekly chart of GBP/USD fashioned a head and shoulders backside in 2020,
broke above development traces starting in 2008 to vary the long run development
from right down to up and has efficiently retested/rallied from the assist
zone within the 1.32s. Now GBP/USD is breaking out of a bull flag
sample with a bullish MACD cross. We expect GBP/USD has medium time period
upside whereas above the 1.32s which might equate to a rally above the 2021
,” BofA provides.

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