GBP/USD Advance Reaches Critical Resistance
- GBP/USD Reaches Critical Daily Resistance
- A Turn in Price Suggests a Move Towards Support Near 1.2150
- Looking for additional trade ideas for the GBP/USD and other Currencies? Check out our Pound Trading Forecast
The GBP/USD is currently trending higher towards daily resistance under 1.2324. This level of resistance is denoted in the graph below as the previous swing high in a developing GBP/USD trading range. If prices fail to break above this area, it opens the pair to then trade back down to support below 1.2150. However if prices break above range resistance, it may suggest that the GBP/USD is in the beginning phases of a new uptrend.
GBP/USD 1 Day, Rebound
(Created using TradingView Charts)
As prices trade near daily highs, traders may look to short-term momentum cues to help decipher the GBP/USD’s next move. Referencing the 5-minute graph below, the Grid Sight Index (GSI) has identified a short-term downtrend developing, with the pair trading off of daily highs at 1.2325. After reviewing 86,272,057 pricing points, GSI has also indicated that price action has continued to advance by 31 pips or more in 32% of the reported 37 matching historical events. With less than half of historic instances showing an increase in price, this may suggest that the Cable may be turning beneath resistance. However if the GBP/USD does trade through the first bullish price distribution at 1.2339, it may suggest that the pair is beginning its bullish breakout higher.
Alternatively, GSI has indicated that prices have declined by 15 pips or more in 59% of the identified historical instances. This places the first bearish historical distribution at a price of 12293. A move through this point would not only show a turn in momentum, but suggest that daily values of resistance are holding in the short term. It should be noted that the final bearish distribution is displayed at a price of 1.2248. A continued decline in price to this point would completely invalidate this morning’s bullish momentum, and suggest that any chance of a bullish breakout has been at least temporarily suspended.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.