GBP/USD: How the bulls will respond in the $1.2450/$1.2500 resistance band? [Video]
|GBP/USD
It is interesting to see a rally on Cable has pulled the market back into an area of resistance and what could be an important crossroads. The question for today’s session is one of how the bulls respond in the resistance band $1.2450/$1.2500. This is an area where there were several lows formed during the first half of June, prior to last week’s breakdown. How the market now reacts around this area of overhead supply will be important for outlook over the coming sessions. It will gauge whether this is an unwind within a downtrend, or something more positive for the bulls. There is a two week downtrend at $1.2530 today also as a barrier which interestingly also coincides around the underside of an old five week uptrend. So this is a key confluence area of resistance now. If the bulls can overcome it, then it will be an encouraging sign of strength. Yesterday’s decisive positive candle needs to be built upon now. It has left a low at $1.2333 and was also a bullish outside day session. A second positive candle would put pressure on the big resistance overhead. Daily momentum indicators are looking less corrective than they were, but need more (RSI needs to be above 50, Stochastics need a bull cross) to suggest the bulls believe in a recovery again.
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