The pound decreases right now versus the USD, but the bias is bullish and we could see another bullish momentum soon if the price only retests the broken resistance line. As you already know, we had a major chart pattern, the price has managed to make an aggressive breakout, it has climbed as much as 1.3209 level, but GBP/USD has opened with a gap down today and now is trading at 1.3139 level.
The outlook remains bullish despite the current sharp drop, maybe the price will only retest the triangle's resistance and then it will climb higher again. GBP/USD goes down after the impressive rally, a rejection from the downtrend line will validate the breakout and it could signal a broader increase in the upcoming period.
However, we'll have a confirmation that GBP/USD will reach new highs only if the price makes another higher high and if it jumps above the 1.3209 level. I said in the previous week that the prospects are bullish as long as GBP/USD is trading above 1.2952.
GBP/USD is somehow expected to resume the upside movement after the valid breakout from the descending pitchfork and after the failure to stabilize below the median line (ML) of the major ascending pitchfork. Some poor US data today could attract the bulls, which will push the price higher.
As I've said, I'm expecting the price to reach new highs after a valid breakout above the 1.3209 high. I've drawn a minor ascending pitchfork to catch a potential upside movement, so GBP/USD maintains a bullish bias as long as it is traded above the lower median line (lml). The next major upside target is seen at 1.3514 as I said in the previous analysis that GBP/USD could reach this level after the failure to approach and reach the median line of the descending pitchfork (black).
Personally, I'll consider going short only from below the 1.2952 level, but it is too early to talk about a major corrective phase as long as the currency pair is trading way above this critical support.
- Trade Setup
Long above 1.3209 level with the first potential target at 1.3514, Stop Loss should be placed below the former low.
