• GBP/USD hit a two-year high against the dollar on Tuesday, supported by expectations that the Bank of England will implement more modest rate cuts compared to the Federal Reserve.
• GBP/USD climbed to as high as $1.3246, its highest peak since March 2022, and was last up 0.34% at $1.3229.
• Markets are currently anticipating 100 basis points of rate cuts from the Fed over its remaining three meetings this year, compared to approximately 40 basis points expected from the BoE.
• Technical signals are strongly bullish as RSI is at 75, daily momentum studies 5, 9 and 10 DMAs are trending up.
• Immediate resistance is located at 1.3248( 38.2%fib), any close above will push the pair towards 1.3300( Psychological level).
• Strong support is seen at 1.3165(38.2%fib) and break below could take the pair towards 1.3079 (50% fib).
Recommendation: Good to buy around 1.3210, with stop loss of 1.3150 and target price of 1.3280.
