GBP/USD Break Out Eyes Further Gains With Bearish Reversal Signal Lacking
- GBP/USD Technical Strategy: Longs Preferred
- Further gains possible in absence of bearish signal
- Dojis on the daily and four hour charts hinted at a bounce
As noted in the most recent candlesticks report, GBP/USD was poised for further gains following a Doji formation on the daily near key support at 1.66602. While the Bearish Engulfing pattern noted on the chart below suggested some hesitation amongst the bulls, it failed to receive confirmation from a successive down-day. With a reversal signal now lacking, further gains are likely, with sellers potentially sitting at near the November 2009 high at 1.6870.
Daily Chart - Created Using FXCM Marketscope 2.0
Intraday price action reveals a drawn-out struggle between the bulls and bears between 1.6750 and 1.6840. The bulls having won out, the break above the range-top, opens the potential for continued strength in the Pound.
GBP/USD: Breaks Above Recent Range
4 Hour Chart - Created Using FXCM Marketscope 2.0
The Piercing Line pattern on the weekly helped to herald the return of the bulls. The perspective from the daily chart helps highlight the significance of the recent breakout to multi-year highs.
GBP/USD: Bulls Return As Piercing Line Forms on Weekly
Weekly Chart - Created Using FXCM Marketscope 2.0
By David de Ferranti, Market Analyst, FXCM
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