GBP/USD rebounds from near an upside line

GBP/USD traded higher on Tuesday after it hit support at the upside line drawn from the low of September 30^th. Overall, the price structure remains of higher highs and higher lows above that line, and thus, we would consider the near-term outlook to be positive.

However, we would like to see a break above 1.3854, the peak of September 16^th, before we get confident on a trend continuation. This would confirm a forthcoming higher high and may initially pave the way towards the peak of September 14^th, at around 1.3913. If the bulls are not willing to stop there, then a break higher may see scope for more advances, perhaps towards the high of July 29^th, at 1.3985.

Shifting attention to our short-term oscillators, we see that the RSI emerged above 50 and is now close to the 70 barriers, while the MACD lies slightly above both its zero and trigger lines. Both indicators detect upside speed and support the notion for further advances.

On the downside, we would like to see a dip below 1.3742 before we start examining the case of a bearish reversal. This will not only signal the break below the aforementioned upside line but also a forthcoming lower low on the 4-hour chart. Initially, the bears may target the low of October 18^th, at 1.3708, or the low of October 14^th, at 1.3670. If the bears are not willing to stop there, then we could see extensions towards the 1.3575 area, which provided support on October 12^th and 13^th.

Share: Analysis feed

The content we produce does not constitute investment advice or investment recommendation (should not be considered as such) and does not in any way constitute an invitation to acquire any financial instrument or product. JFD Group, its affiliates, agents, directors, officers or employees are not liable for any damages that may be caused by individual comments or statements by JFD Group analysts and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his investment decisions. Accordingly, you should seek, if you consider appropriate, relevant independent professional advice on the investment considered. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances or needs. The content has not been prepared in accordance with the legal requirements for financial analyses and must therefore be viewed by the reader as marketing information. JFD Group prohibits the duplication or publication without explicit approval.

72,99% of the retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money. Please read the full Risk Disclosure: https://www.jfdbank.com/en/legal/risk-disclosure