News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Mixed
Wall Street
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
GBP/USD
Bullish
USD/JPY
Bullish
More View more
Pound Technical Forecast: GBP/USD, What to Watch Following Big Pop

Pound Technical Forecast: GBP/USD, What to Watch Following Big Pop

Paul Robinson, Strategist

GBP/USD Technical Outlook

  • Gradual chopping decline since Feb smacks of corrective behavior
  • Bull-flag coming into view that could soon trigger
  • A breakdown to 13500 would still leave longer-term outlook intact
Advertisement

Pound Technical Forecast: GBP/USD, What to Watch Following Big Pop

Last week, I noted that the chart of GBP/USD was looking increasingly bullish with the development of a bull-flag at support. Yesterday’s pop broke price out of the pattern and above the 13919 resistance level from earlier in the month. Things are looking up for cable, but the path is anything but certain.

Cable can be a tricky one to trade, often taking unconventional paths to where it ultimately arrives. The breakout of the bull-flag is clear cut, done in an explosive fashion. This should set up for higher levels in the near-term. But, don’t be surprised if there is a fair amount of backing-and-filling before that happens.

It would be fair either way, whether we see a shallow or deep retracement, for GBP/USD to back off here given the difficulty it had during the first half of March getting through 14000. A retracement may first find support at the 13919 swing-high it just crossed.

A hold at that resistance now turned support would be one of the cleaner possible scenarios. Holding between support and the 14000 resistance may create a horizontal pattern to work with. Also a clean path. But it is entirely possible cable retracements much or all of the up-move it just made before running higher again.

So what is a trader to do? If long from good prices, then sitting tight for now appears to be a prudent move. For would-be longs, waiting for a smallish pullback/consolidation may offer the best risk/reward. Getting above 14000 and holding is the next key.

In any event, the high at 14241 looks like the next top-side objective. To bring into question the broadly bullish uptrend since March of last year, GBP/USD will need to break the nearly one-year-long trend-line it just rallied off of and trade below the 13668 threshold.

GBP/USD Daily Chart (Bull-flag broken)

GBP/USD daily chart

GBPUSD Chart by TradingView

Resources for Forex Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

---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.

DISCLOSURES