GBP/USD Price Analysis: Bulls looking for a discount to target 1.3380/90 confluence area

GBP/USD corrects the BoE rallies imbalance towards daily support.
1.3380/90 confluence targets are compelling from an hourly basis.

Ross J Burland FXStreet

GBP/USD has been accumulating and broke higher on the daily chart following today's surprise hike of 15bp from the Bank of England. At the same time, the US dollar has been unable to break the 97 levels in the DXY index.

As illustrated on the daily chart, below, the price has rallied strongly in a correction of the dominant bear trend and is leaving a wick on the daily candle.

GBP/USD daily chart

This wick represents short selling on the lower time frames as the market mitigates the imbalance of the price action. This gives rise to an opportunity to buy the dip.

GBP/USD H1 charts

We can see the fade on the hourly time frames and where the price might be expected to stall within the correction. Zooming out, we can see that the price could rally as high as 1.3380/90 which is where the next point of control is on the sessions 22nd Nov and high 23rd Nov. This also has a confluence of the -272% Fibo of the correct correction's range.

We have a similar scenario on the US dollar chart:

DXY H1 chart

The price has hit the 61.8% Fibonacci retracement and the resistance could lead to the price action to continue south. This would play into the hands of the cable bulls seeking the upside continuation on the hourly chart.

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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