Consolidates the gains from yesterday/stays above support
The GBPUSD is consolidating the gains seen in yesterday's trading (see post from yesterday). The price made new highs going back to January 2nd today, but ran out of momentum after yesterday's 200+ plus pip move.
Looking at the daily chart, the topside trend line moved up to 1.5445 today. The high reached 1.5418 (it was closer yesterday at 1.5425). The 50% of the move down from the December high comes in at the 1.5367 level. The low today came in at 1.5369 (so far). This level held on the 5 minute chart yesterday afternoon before taking the last push to the upside. The consolidation makes sense today.
Taking a step back to assess the technical perspective, the price yesterday made a big break above the longer term trend line starting from the September 2014 highs (see daily chart). The longer term trend is still down of course, so rallies are likely to find overhead resistance. However there is room to roam if the new support levels can hold and the upside targets can be pushed.
The support at the 1.53675 area has held so far today. That is good for the bulls. The pair can dip further and keep the corrective buyers still in charge. The 1.5351 and 38.2% of the move up at 1.53369 is another support level that should hold and keep the buyers in the shorter term in control.
It is also important for the correction, for targets above to be broken. The topside trend line on the daily chart at 1.5445. The 61.8% at 1.54659 and the 1.54836 (low from December/2014) are the next close targets to get and stay above. A break above those targets keep the corrective buyers satisfied and the bullish car gassed up.
Where could the price go if the bullish bias remains?
The 100 day MA (blue line in the daily chart above) currently comes in at 1.5642. The price has not been above this moving average line since August 6, 2014 (that MA is moving down of course). The price could make it's way to that level should the bullish bias continue for the pair.
