How High Can a Surging GBPUSD Go?

[Ben Graham]

 

Where is GBPUSD Headed by The Savvy Trader

 

How High Can a Surging GBPUSD Go?

 

This week’s price action in the dollar has been choppy, lacking a clear one-way trend, but the broader tone has been decidedly negative. We opened the week near the highs and are closing near the lows, not an encouraging sign for dollar bulls.

 

Watch GbpUsd

A key currency to watch in this context is GbpUsd, which continues to test the upside and a key level around 1.3550. Sellers have consistently stepped in just below it, indicating it remains a psychological and technical cap for now. The market seems to be preemptively pricing in a potential pause but as discussed previously,  a break through 1.3550 opens the door to 1.3600, 1.4000, and even 1.4200. Beyond that lies a much larger upside risk toward 1.5700, a level that would imply broader dollar weakness in the macro picture.

Looking ahead, the upcoming Monday holidays in both the UK and the US could result in thinner liquidity and distorted moves. Additionally, month-end flows may introduce further volatility and directional ambiguity, as portfolio rebalancing distorts normal trading behavior.

 

Watch GbpUsd 1.4000 options

Meanwhile, options markets are flashing signs of increased tension. Implied volatility has been rising, and bank trading desks are reportedly active in GbpUsd call options around 1.4000. This positioning suggests some institutional players are preparing for a breakout although it’s worth remembering that for every option buyer, there is a seller. The market remains finely balanced between breakout potential and resistance defense.

Keep in mind that while the dollar hasn’t broken decisively lower yet, the risk-reward increasingly tilts toward further weakness, especially if key resistance levels in crosses like GbpUsd give way. Keep an eye on volatility, upcoming data, and holiday-driven illiquidity, all of which could conspire to accelerate the next directional move.

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GbpUsd Monthly Chart (added by global-view)

 

Addenden added by global-view

 

Why does  GBPUSD have the nickname “Cable?”

GBPUSD is called “Cable” because of the transatlantic telegraph cable that was laid in the mid-19th century to facilitate communication between London and New York.

• In 1858, the first successful transatlantic telegraph cable was laid between the UK and the US.

• This cable allowed for real-time transmission of financial data, especially currency exchange rates between British and American traders.

• Since GBPUSD was the most actively traded currency at the time and traders began referring to it simply as “Cable.”

• While many retail traders call GBPUSD the British Pound, professional traders often refer to it as Sterling or Cable.

 

How High Can a Surging GBPUSD Go?

 

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