Forex Technical Update
The GBP/USD rallied in during Thursday's trading session on the coattails of risk-on trading. However it was a bit less aggressive, more subtle then the EUR/USD or AUD/USD for example. It was late to the party, and the GBP/USD rally is now held at a cluster of resistance just above 1.61 (market reached 1.6140). There is the 61.8% retracement, the 200-day simple moving average, and pivot seen on 8/10, 8/11, 6/16, 6/17 and tested 5/18-5/24. A break above this cluster opens up the 1.6330, 78.6% retracement level and potentially the 1.6618 high.
Looking at the 4H chart, we can see some important support levels in the case of a throwback from 1.6140. First the 1.6040 level is a resistance pivot and should be tested as support. IF that breaks the 1.59 level is going to be important. Being able to reach it is already breaking below a rising trendline. If we get a weak pullback followed by a break below 1.59, the market is like range-bound. However, as a counter-trend projection, the bearish outlook should be contained above the 1.57, 200 SMA level. Also watch for 1.5850 as a resistance pivot to be tested as support.
Fan Yang CMT is the Chief Technical Strategist FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.