Technical Market Outlook:
The recent upside breakout above the upper trend line resistance has invalidated the Bearish Pennant price pattern on the H4 time frame chart of GBP/USD and the bulls hit the level of 1.2388 ( at the time of writing the analysis). The technical resistance is located at 1.24221 and the intraday technical support is seen at 1.2336. The momentum on the H4 time frame chart is back above the level of 70, so bulls are temporary in control of the market, but the market conditions are extremely overbought. Please notice, that the mid-term outlook remains bearish due to the Bearish Cross of 50 and 100 DMA on the daily time frame chart, so as long as the level of 1.2466 is not clearly violated, the down trend might be resumed soon.
Weekly Pivot Points:
WR3 - 1.2783
WR2 - 1.2587
WR1 - 1.2483
Weekly Pivot - 1.2287
WS1 - 1.2183
WS2 - 1.1987
WS3 - 1.1883
Trading Outlook:
The weekly time frame chart shows the Bullish Engulfing candlestick pattern was made during the breakout above the level of 1.2340, so the bulls are in charge of the market and they are pushing the price higher. The market already trades above 50 WMA and is heading towards 100 WMA seen at 1.2504. On the other hand, any sustained breakout below the key long term technical support seen at the level of 1.1802 would dramatically increase the chances of another leg down towards the level of 1.1494.
