• EUR/USD could be in line for a significant breakout which would be expected to drag GBP along for the ride. 
  • GBP/USD needs to clear 1.3690 for bluer skies. 

As per the prior analysisGBP/USD Price Analysis: Bears press 1.3700 critical daily support, the price of cable is firming at the projected support area and there is now a focus on the upside. 

GBP/USD prior analysis

As illustrated last Thursday, GBP/USD's hourly chart was pressuring support below a double top which added conviction to the downside prospects. The targeted area was shown to be between 1.3620 and the 1.3640s.

Meanwhile, the bears are pulling out around this structure as per the following 4-hour chart's illustration:

GBP/USD 4-hour chart

The price could be expected to now move higher to test what could prove to be a tricky layer of resistance. If the bulls do commit, then a break of the 4-hour highs would be required before prospects of a bullish continuation might unfold on the daily chart as follows:

GBP/USD daily chart

 As drawn, the price has already made a 50% mean reversion of the prior bullish impulse. However, bulls need to break 1.3690 and in doing so, they would be on course for a continuation to the upside. However, given that there is still room to go until the counter trendline is tested, there is the risk that the price continues to fall in the coming sessions in order to mitigate the inefficiency of the price between 1.3604 and 1.3637:

On the other hand, if the US dollar continues to bleed out, the pound may well follow in the euro's footsteps and keep up with the bid:

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

AUD/USD dribbles around key support below 0.6900, China PMI, US PCE inflation eyed

AUD/USD dribbles around key support below 0.6900, China PMI, US PCE inflation eyed

AUD/USD holds onto the previous day’s bounce off important support while taking rounds to 0.6870 during Thursday’s inactive early Asian session. In addition to defending the corrective pullback, the Aussie pair also portrays the market’s anxiety ahead of important data from a major customer China.

AUD/USD News

USD/JPY advances towards 137.00 amid firmer DXY and mixed Japan data

USD/JPY advances towards 137.00 amid firmer DXY and mixed Japan data

The USD/JPY pair is aiming to recapture its fresh 23-year high around 137.00 as the DXY has strengthened on hawkish commentary from Fed chair Jerome Powell. Japan’s mixed Industrial production data has weakened the yen bulls further.

USD/JPY News

Gold stays on the way to $1,807 support ahead of US PCE inflation

Gold stays on the way to $1,807 support ahead of US PCE inflation

Gold Price struggles to defend the previous day’s bounce off short-term key support during Thursday’s Asian session. In doing so, the yellow metal remains indecisive around $1,818. The yellow metal dropped to the lowest levels in two weeks the previous day.

Gold News

Polygon's MATIC price signals hard times to come, here's why

Polygon's MATIC price signals hard times to come, here's why
Polygon’s MATIC price signals bears have re-entered the market. If the profit-taking continues, a cataclysmic fall could occur to breach the $0.31 low
Read more

FXStreet Premium users exceed expectations

FXStreet Premium users exceed expectations

Tap into our 20 years Forex trading experience and get ahead of the markets. Maximize our actionable content, be part of our community, and chat with our experts. Join FXStreet Premium today!

BECOME PREMIUM

Forex MAJORS

Cryptocurrencies

Signatures