The Chart of the Week: GBP/USD bulls to defend 1.2980 before surge towards 1.3200

GBP/USD's recent advances are creating a bullish bias on the longer-term time frames.
Bulls will need to defend the daily reverse head and shoulder's neckline, 1.2980/00.

Ross J Burland FXStreet

GBP/USD has advanced through a critical resistance following a series of 3 daily advances of higher highs and lows is it approaches a 50% retracement of the late August bear trend.

The price is now through a critical resistance between 1.2980 and 1.3000 for which is expected to be resisted in coming days prior to the next advance towards 1.3200.

The following is a top-down analysis of the market structure and price action flow to date.

Monthly impulse in making

The monthly price action is bullish following a test and rejection of the support structure. Bulls will be looking for bullish confirmation on lower time frames.

Weekly resistance turns support

The weekly resistance was broken and is expected to act as support, confirming the monthly bullish bias.

Reverse Head & Shoulders

The reverse head and shoulders also compliment the bullish bias.

Having broken the resistance, a restest of the structure's neckline can be expected before the next meaningful impulse higher towards 1.3200.

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Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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