Overview :
Range trading carry on in the GBP/USD pair and intraday bias remains a strong bullish market first.
Today, the GBP/USD pair continues to move upwards from the level of 1.3637. The first support level is currently seen at 1.3637, the price is moving in a bullish channel now. With 1.3637 support intact, further rise is expected.
Furthermore, the price has set above the strong support at the level of 1.3637, which coincides with the 61.8% Fibonacci retracement level. This support has been rejected three times confirming the veracity of an uptrend.
According to the previous events, we expect the GBP/USD pair to trade between 1.3637 and 1.3758. So, the support stands at 1.3637, while daily resistance is found at 0.1.3758.
On the upside, break of 1.3705 will extend the whole up trend from 1.3758 to the test the double top on the one-hour chart.
Therefore, the market is likely to show signs of a bullish trend around the spot of 1.3637. In other words, buy orders are recommended above the spot of 1.3637/1.3705 with the first target at the level of 1.3758; and continue towards 1.3800.
Moreover, if the pair succeeds in passing through the level of 1.3800, the market will indicate a bullish opportunity above the level of 1.3800. A breakout of that target will move the pair further upwards to 1.3830.
On the downside, however, break of 1.3639 support will now suggest short term topping, on bearish divergence condition in four- hour RSI. Intraday bias will be turned back to the downside for deeper pull back.
However, if the GBP/USD pair fails to break through the resistance level of 1.3758 today, the market will decline further to 1.3519 in coming days.
Conclusion:
Rise from 1.3667 medium term bottom is in progress. Further rally would be seen to 1.3758 resistance and above, - next objectives 1.3800 and 1.3830. On the downside, break of 1.3639 support is needed to indicate perfecting of the rise. Otherwise, outlook will stay arefully, bullish even in case of deep pullback.
Trading recommendations :
Buy-deals are recommended above 1.3667 with the first target seen at 1.3758. The movement is likely to resume to the point 1.3800 and further to the point 1.3830 .
The descending movement is likely to begin from the level 1.3639 with 1.3575 and 1.3519 seen as targets.
Trend lines :
- Question : How many tops or bottoms should have to emphasize a trend line?
- Answer : Three, 3 - trend lines.
Look at the chart (GBP/USD) carefully, you will note that :
- If you draw trend lines, you should never oblige them to fit the market.
- To draw trend lines properly, all you have to do is locate two major tops or bottoms and connect them. So, it takes at least two tops or bottoms to draw a valid trend line but it takes three to confirm a trend line.
Important tips to remember about trend lines :
- When constructing a channel, both trend lines must be parallel lines to each other. Predominantly, the bottom of channel is considered a buy area while the top of channel is considered a sell area. Like in drawing trend lines, do not ever force the price to the channels that you draw! A channel limit that is slanting at one angle while the corresponding (parallel) channel limit is slanting at another is not correct and could lead to bad trades. Channels are just another tool in technical analysis which can be used to determine good places to buy or sell. Both the tops and bottoms of channels represent potential areas of support or resistance.
