Forex technical analysis: GBPUSD breaks out of the Red Box

Technical Analysis

Author: Greg Michalowski | gbpusd

15 day range extends to the upside.

The GBPUSD broke outside of the "Red Box" (see prior posts) that confined the pair for the most part between a low at 1.2860  in my near 1.2990 (see Red Box in the chart below). 

Yesterday, the upside limit was tested  and found sellers. The ccorrection stalled ahead of the  38.2% retracement of the move up rom last week's low. That retracement was ttested again at today's low levels.  

The UK retail sales report sent the pair through the 1.2990 level and above the key 1.3000 level as well.  The high stalled just ahead of the 1.3050 level.  

The better US data is pushing the pair a bit lower, but on the break outside the Red Box today, the bulls still have to be given the nod and advantage.  Support will be eyed at the 1.3000 level now.  It is the 38.2% of the day's trading range in addition to being a natural level of support.  The midpoint of the range is 1.2992. That comes in just above the quadruple highs from the Red Box.   

Let's face it folks...the GBPUSD broke out above a 15 day ceiling.  You have to give the benefit of the doubt to the break and expect that traders will come in and buy the dips against the old resistance.  If they fail to hold the level though, watch out below as traders react to the shifting technical winds (and the failure!).

PS the next upside target on a continuation of the upside comes in at 1.3071. That is topside trend line on the daily.