The GBPUSD fell in London AM and early NY trading but after breaking below trend line support, buyers reeemerged and have since taken the price back higher. The subsequent move higher has taken the price above the 100 and 200 bar MA on the 5 minute chart (see blue and green line in the chart below). Trend line resistance on the chart comes in at 1.6004. Additional resistance comes in at 1.6008 off the hourly chart (see chart above). A move above this area would be the next upside confirmation for the pair.
Looking closely at the 5 minute chart below, the 38.2% of the move up from Friday initially held support today (see yellow line in the chart below). When the price broke below the market rebounded back above the key line and rotated back to the topside trend line at 4 in the chart below. The next break below the 38.2% sent the pair to the lows for the day.
Now the price is back above the 38.2%. Stay above at 1.5989 could be the technical clue for traders today. Watch this level for support on corrections with a break of the 1.6008 area above as a clue for more upside. Failure to extend, and the market traders may be signaling a range trade for the rest of the day.
Should the bullish bias continue (not go back below the 1.58989 as close support), the next targets on the topside has the high for the day at 1.6018 and then the high from Friday at the 1.6032.Above that the 1.6061-65 area becomes the next target as the price moves closer to the high “V” formation from the end of April/beginning of May (see chart below). This V-area had a quick move higher toward trend line resistance but then reversed almost as quickly as sentiment for the GBPUSD turned around. Trend lines off the most recent highs currently come in at 1.6132 and 1.6182 respectively (see chart below). These would be the next stops in the progression of a bullish move.
