We saw some life from the bulls on Thursday, as the price made a low just a fraction above 1.1838 which was anticipated to be support, before rising strongly and breaking bullishly out of a consolidating triangle. The resistance at 1.1989 held, and then the price fell back, and currently looks to be without any life or direction at all as it sits roughly halfway between these two levels which have each acted to hold the price. I do not see the trend lines shown in the chart below as having much influence any more. There is still a long-term bullish trend, but it looks as if this pair is not going to do anything interesting today.
This pair rose extremely strongly last week, in line with the long-term bullish trend, boosted by higher than expected U.K. inflation data and a more hawkish tone from the Bank of England, which is now seen as more likely to raise interest rates sooner than had been expected. The price is now at levels not seen since the day after Britain voted to leave the European Union, and looks quite likely to rise even further. However, the short-term outlook is suggesting a bearish pull-back, as the price keeps failing to get established above the round number at 1.3600.
This pair is starting to look more technically interesting. We have new lower resistance, and a short-term triangle pattern emerging as the support level at 0.7216 holds firm. I do not have much faith in 0.7262 as resistance, I think the two support levels below look much stronger and are significantly more likely to produce good bullish reversals, so I maintain a slight bullish bias for the time being.
As I said on Thursday's analysis, Gbp broke out above 1.3016, retraced back to it, just once before continuing long. I went long after the engulfing candle following this breakout and is still holding onto this position. My expectations is that the price should rise even higher towards the resistance line 1.3151. If this resistance is broken, then the price could rise towards 1.3275. According to the 4 hours chart above, long positions still remains more ideal and can safely be recommended towards 1.3151 sell positions can be recommended in case the price is rejected from 1.3151.
Technical levels:
Resistance levels
R3:1.32161
R2:1.31663
R1:1.31321
Pivot
1.30823
Support Levels
S1:1.30481
S2:1.29983
S3:1.29641
Trade Signal
Long towards 1.3151
