Tests 38.2% retracement target
The GBPUSD has raced higher, making new session highs and trades at the highest level since Feb 4th. The pair is also testing the next target at the 1.46339 level. This is the 38.2% retracement of the move down from the June 18, 2015 high. The high price has reached 1.4635 so far. Remember yesterday, the pair moved above - and closed above - the 100 day MA for the first time since September 18th (see post from yesterday on this pair).
The next target on a break above, comes in at the Feb high at 1.4667. Topside trend line comes in at 1.4689. The high price for the year came in on the 1st day of the year at 1.4815. The 2015 year closed at 1.4737.
Looking at the 5-minute chart, the trend has had two legs higher. The first corrected to the 38.2% area and bounced. The second one higher has the pair testing that resistance on the daily. If the pair corrects lower off that level, look for dip buyers to come in near what I call the "correction zone". This is defined by the 38.2-50% of the last trend leg higher. If the buyers loved it racing higher, they should love it at 38.2-50% off (just like my shoppers). That is the next risk defining area for this trend move higher. Stay above and the bulls remain in control and we could even see a break and run above the other topside resistance.