Forex Technical Update
Bullish Channel: The GBP/USD has been very strong and has been rallying in an upwards channel. A break above 1.6470 recently opened up further bullish scenario and the first upside target at the 1.6546 pivot was reached. Risk-off trading brought the market back here, and despite violation of this as support, the market still rejected attempts to break below the general pivot zone between 1.6470 and 1.6440. Now, GBP/USD bulls are back in force.
- The 1H chart shows the GBP/USd maintaining bullish momentum as the RSI reading bounced off 40 and is breaking back above 60. As the title notes, price action remained above the rising channel support, and the GPB/USD looks to be in a bullish continuation.
- A break above 1.6590 now opens up the next pivot seen in the daily chart at 1.6745.
- From the setup seen in the daily chart, the market is staying above the 200SMA, but the RSI has yet to confirm bullish momentum.
- We can tell though that price action is bullish.
- Note that if we get to 1.6745 and break it, and the RSI breaks above 60, and probably by then 70, we would open up a longer-term bullish scenario (towards 1.7150-1.7170 for a wave equality of the 12/28/2010 - 4/28/2011 rally, projected from the 7/12/2011 low.
Fan Yang CMT
Chief Technical Strategist