- The GBP/USD pair is showing signs of strength following a breakout of the highest level of 1.3138. On the H1 chart, the level of 1.3138 coincides with 50% of Fibonacci, which is expected to act as minor support today. Since the trend is above the 50% Fibonacci level, the market is still in an uptrend. Furthermore, the trend is still showing strength above the moving average (100). Hence, major support is seen at the level of 1.3138 today.
Thus, the market is indicating a bullish opportunity above the above-mentioned support levels, for that the bullish outlook remains the same as long as the 100 EMA is heading to the upside.
Therefore, strong support will be found at the level of 1.3138 providing a clear signal to buy with a target seen at 1.3334.
If the trend breaks the minor resistance at 1.3334, the pair will move upwards continuing the bullish trend development to the level of 1.3399 in order to test the daily resistance 2. Another resistance is seen at the price of 1.3480, which coincides with the double top in the same time frame.
This week we expect that the GBP/USD pair will move between the levels of 1.3138 and 1.3480 (around 300 – 342 pip).
However, it would also be save to consider where to place a stop loss; this should be set below the second support of 1.3057.
The material has been provided by InstaForex Company – www.instaforex.com