GBP/USD: The bulls are in control of the medium-term range now [Video]
|GBP/USD
The near term outlook for sterling has improved considerably in the past week. On Cable, we have seen the sterling bulls turning a corrective three week downtrend, into a base pattern on a move above $1.2540. This base took on a decisive formation yesterday with another strong positive candlestick (the sixth positive close in the past seven sessions). Closing above $1.2540 implies a move now to test the resistance of the June high at $1.2810 and is a move backed by improving daily momentum. Stochastics are rising with upside potential into the 80s, whilst RSI is into the 60s this morning. A bull cross on MACD lines adds to conviction (although with Cable being in a three month trading range, this move lends less influence). Resistance at $1.2685 is important, but the key test is how the bulls react around the barrier of the seven month downtrend (which is at $1.2700 today). How the bulls react around this resistance will be a good gauge of their intent. We look to buy into weakness, with the hourly chart showing $1.2600 being the initial support whilst the neckline of the base at $1.2540 is growing in importance now. This is added to by a one week uptrend line support also at $1.2540 today. The bulls are in control of the medium term range now whilst the support at $1.2435 remains intact.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.