GBPUSD broke above the descending price channel at 1.3100 on its weekly chart, indicating that lengthier correction for the long term downtrend from the July 2014 high of 1.7190 is needed.

On the 4-hour chart, the GBPUSD pair stays above the bullish trend line from 1.2589 to 1.2811, with support at around 1.3015. As long as the trend line support holds, the upside movement could be expected to continue and next target would be at 1.3444, followed by 1.3700.

However, the price action from the October 2016 low of 1.1946 would possibly be correction of the long term downtrend. There is another long term bearish trend line on the weekly chart, with resistance now at around 1.3700. This would be the final target for the correction rebound. Reversal could be expected after touching this trend line resistance.

On the downside, a clear break below the trend line on the 4-hour chart could bring price back to next support level at 1.2932, followed by 1.2811. The 1.2811 level could be treated as the key support for the upside movement from the January 16 low of 1.1987, below this level could signal completion of the uptrend, then the following downside movement could bring price to retest 1.1946 support.

Technical levels

Support levels: 1.3015 (the bullish trend line on the 4-hour chart), 1.2932 (the July 20 low), 1.2811 (the key support), 1.2589 (the June 21 low), 1.2109 (the March 14 low), 1.1946 (the October 2016 low).

Resistance levels: 1.3444 (the September 2016 high), 1.3700 (the trend line on the weekly chart).

This article is written by Franco Shao, a senior analyst at ForexCycle.

© 2017 Copyright Franco Shao - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.