Next targets to eye
The GBPUSD has moved to yet another 19 month high (until it moves above 1.5019 it will always be a 19 month high) . The pair closed at 1.3995 yesterday. The price has just printed up to 1.4195. By my calculation that is 200 pips. When is it enough?
The market often turns at a technical level that is obvious to a lot of traders. Why? Traders can define and limit risk against the level. Risk focused traders start moves, stall moves, reverse moves. They tend to move the market.
Looking at the weekly chart, the next key target level comes in at the 200 week MA at 1.4393 (green line in the chart above). The 61.8% of the move down from the 2015 high comes in at 1.44213. That area would be a longer term target on continued bullishness for the pair. With the price another 200 pips away, I don't expect it to be tested today. So what can we find on other charts?
Drilling to the daily chart, the pair tested the 1.4004-11 area yesterday which was the swing lows from April and June 2016. That was a key target. The price moved above that level but failed and closed back below.
Today, the run higher broke those levels and ran. The next target that I see on the chart below comes in at a topside trend line at 1.4257. Above that the 1.4331 was home to some swing lows in May/June 2016. At 60-70 pips away, that 1.4257 level is a good distance away too for the day. Can we get there? Yes, but it will be more of a stretch.
Coming down further to the hourly chart, I have put a channel in that connects lows on the bottom, and projects a parallel line off recent tops.
The price has moved above a lower channel trend line at the 1.4150 level (see chart below). That is a risk level for longs. The next target above comes in at 1.4225. That is the next level that gives traders a level to define and limit risk..Get up there and I would expect to see a stall.
Can the pair turn around now? Sure. The 1.42000 level is "natural" level that traders will often lean against.
However, if you are looking for a technical level to lean against, then keep an eye out for the 1.4225. A break above (and staying above) will work toward the other target levels from the daily and weekly charts.