GBP/USD Price Analysis: Looks north, with inverse head-and-shoulders in play
- GBP/USD is bidding up the next leg higher.
- Inverse head-and-shoulders confirmed on the 4H chart.
- Bull cross and bullish RSI point to more gains.
GBP/USD is holding the higher ground while looking to extend the advance above the 1.3700 level.
The cable reached multi-year highs at 1.3719 on US President Joe Biden’s stimulus boost driven upbeat market mood and the UK’s successful attempts in rapid vaccinations.
From a short-term technical perspective, the spot has confirmed an inverse head-and-shoulders breakout on the four-hour chart, which calls for a test of the measured target above 1.3800.
Ahead of that level, the swing high at 1.3719 could be retested. Acceptance above the latter could see the price heading towards the 1.3800 mark.
Relative Strength Index (RSI) points higher, now at 65.28, suggesting that there is more room to the upside. Meanwhile, the bullish crossover, as represented by the 21-simple moving average (SMA) rising above the 50-SMA, adds credence to the additional upside.
Alternatively, the daily low of 1.3652 is the level to beat for the bears. The next significant support is seen around 1.3615, where the abovementioned averages coincide.
GBP/USD: Four-hour chart
GBP/USD: Additional levels
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
