GBP/USD: the pair soared over 140 since Wednesday, Citi bank thinks Brexit aftermath could lead the pair to 1.38

The GBP/USD pair took off on Wednesday, and increased its gains yesterday as well. After hesitating for about a day around 1.30, the Pound jumped Wednesday morning, marking a daily high of 1.3120 in the afternoon.

After a brief correction, a bullish consolidation then took place overnight, and bullish momentum seems to behave picked up as Thursday's European session began, with the GBP/USD hitting a new high of 1.3143, a level that had not been visited in 7 months.

At the origin of this strong increase, we find unsurprisingly hopes linked to Brexit, and more precisely concerns regarding the UK elections that will take place this month.

Last week, the market was concerned about a rise in power of the Labour Party. But the latest polls this week suggest that they have reached a ceiling, which seems reassuring.

It should also be noted that the disappointing US statistics published on Wednesday also played a mechanical role in the rise of the GBP/USD, weighing on the US dollar.

From a technical point of view, the breakaway from 1.30 on Wednesday is in itself a positive signal, which should make this key psychological threshold a new low for the GBP. Below this threshold, the bullish outlook could be questioned. Before this threshold, 1.31 should also be considered as a support level.

Upwards, 1.32 is the next target resistance level, ahead of 1.33, followed by the annual peak marked on 13 March at 1.3380.

But according to some, the outcome of the Brexit could take the pair even further. In an analysis published on Wednesday, Citi Bank set a 2020 target of 1.38.

Currently, the GBP/USD pair is trading around 1.3151 on the forex.

Hourly GBP/USD chart