Pound Technical Outlook – GBP/USD In Slow Grind Mode, Big Resistance Ahead
GBP/USD Technical Outlook: Neutral
- GBP/USD continues to rise within the confines of a channel
- Stiff test ahead with long-term resistance not far away
GBP/USD continues to stay within the confines of an upward channel since bottoming in late September. For it to pick up momentum it will need to break out of the structure, but the caveat to a breakout of the smaller structure is there will be an even bigger obstacle to overcome.
Just ahead lies a big crossroad of resistance with a trend-line from 2007 and the 2009 low intersecting at roughly the same juncture. The turn down in September started at that crossroad; it will be interesting again to see how price might react upon a test.
The 13500 area is formidable, and if GBP/USD is to trade higher it will need to be crossed. A rejection lower won’t immediately be bearish, but suggest another sizable round of selling could be in store, so at that juncture we would want to see how price can hold up at the lower channel line.
The overall feeling for the days ahead is that risk/reward from either side isn’t particularly appealing without further clarity.
GBP/USD Daily Chart (rising within confines of a channel)
GBP/USD Monthly Chart (big long-term resistance)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.