• GBP/USD hovered near six-month high on Tuesday as sterling was underpinned by expectations for interest rate hikes by the Bank of England this year.
• The pound has rallied strongly over the past four weeks as robust economic data fuelled expectations of a potential Bank of England rate hike.
• Markets largely shrugged off Monday’s announcement of tougher U.S. sanctions on Iran, with only a limited reaction across currency markets..
• Attention is now shifting to the Kansas City Fed’s Jackson Hole Economic Symposium, scheduled for August 27-29, where Federal Reserve Chair Kevin Warsh is due to deliver the keynote speech..
• Market participants will closely scrutinize Warsh’s remarks for clues on the Federal Reserve’s policy outlook for the remainder of the year.
• Immediate resistance is located at 1.3678(23.6%fib), any close above will push the pair towards 1.3706(Higher BB)
• Strong support is seen at 1.3623(Daily low) and break below could take the pair towards 1.3530(38.2%fib).
Recommendation: Good to buy around 1.3610, with stop loss of 1.3550 and target price of 1.3760
