The GBPUSD has moved higher today – helped by a further decline in the EURGBP. The rally higher pushed the price above channel trend line resistance at the 1.55645 level in the London morning session. NY traders initially had different idea however, and pushed the price is back below the trend line resistance (see chart above). Support against an upward sloping trend line and the 100 bar MA (blue line in the chart below) on the 5 minute chart has pushed the price back higher and it looks as though there may be more upside to explore for the pair.
The key target above for the pair is not far ahead, however. The 200 hour MA and the 50% of the July trading range comes in at the 1.5586-90 area. This level should give traders cause for pause with a break being an invitation for further upside momentum. With the up and down action from yesterday’s action still fresh in trader’s minds, be aware of the possibility of failures and reversals. So far today, the bias remains to the upside with higher lows and higher highs. Keep that pattern and the buyers can feel happy. Break the pattern and they are just as likely to reverse.
