GBPUSD Breakout Levels- Key Resistance in Focus Ahead of BoE
- GBPUSD Breakout approaching initial resistance hurdle
- Updated targets & invalidation levels
- Event Risk on Tap This Week
Chart Created Using FXCM Marketscope 2.0
Technical Outlook: Sterling made a breach of the weekly opening-range highs today with the rally now eyeing confluence resistance at 1.4560/89. This zone is defined by the 50% retracement of the November decline, the 1.618% extension of the advance off the lows and the 2015 low-day close. The immediate topside bias is at risk below this level, but we’ll be looking for pullbacks / long triggers to offer more favorable entries. Note that daily momentum has also broken above a multi-month resistance-trigger and keeps the trade constructive while above the median line extending off the May high.
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Notes: A clear break of the weekly opening-range highs & channel resistance today has the pair eyeing the 1.4660/89 resistance level. We’ll be looking for resistance triggers on a pullback with a breach above this key zone targeting subsequent objectives at the 1.4731 (2016 open) and more significant resistance at 1.4795-1.4812 where the 2013 low & the key 61.8% retracement reside. Subsequent targets eyed at 1.4894 & 1.4964.
Interim support rests with the median-line / 1.4560 backed by our near-term bullish invalidation level at 1.4480 where the 100% extension converges on former channel resistance & the lower median-line parallel (highlighted). A break back below the weekly opening-range highs at 1.4444 would be needed to put the shorts back in control. A quarter of the daily average true range (ATR) yields profit targets of 38-41pips per scalp. Added caution is warranted heading into the Bank of England interest rate decision tomorrow & U.S. Non-Farm Payrolls on Friday with releases likely to fuel volatility in the Sterling & USD crosses.
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Relevant Data Releases
Other Setups in Play:
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---Written by Michael Boutros, Currency Strategist with DailyFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.