Daily view:
The cable invalidated the reversal Head and Shoulders pattern maintaining quite strong bullish momentum to the upside.
Daily closure above 1.5719 (the highest level in August) enhanced further bullish pressure to be applied, so that the bulls could step above 1.5760 (the highest level in June).
Previous bullish swing targeted 100% Fibonacci Expansion level. This rendered the current one targeting the same level which was bypassed when the pair stepped above 1.6035 recording a daily high at 1.6204 which corresponds to 127.2% Fibonacci Expansion Level.
The pair expressed a bearish Harami daily candlestick off 1.6150, which was followed by daily closure below 1.6035 which took place on Friday. However, the cable bounced from recent lows resuming the upside momentum, having climbed back above 1.6100 as the USD weakens during the previous trading sessions.
4H view:
Obvious bullish pressure has been applied during the past two weeks rendering 1.5450 a valuable ascending bottom which was established during August.
The ascending channel depicted on the chart gave bullish potential for the pair towards 1.6200 where a significant Fibonacci Level is located as depicted on the chart.
Re-сlosure below 1.6040 enables the bears to initiate an early retracement move towards 1.5770 where the lower limit of the channel is located provided that the pair does not break through 1.6205. However, 4H fixation above 1.6205 enables the bulls to reach 1.6285 very quickly ( 141.4% Fibo Expansion ).
Fundamentally, Sterling rose to an eight-month high earlier this month after strong UK jobs data released last week, but fell back slightly when Gross Domestic Product (GDP) figures showed year-on-year output rose by 1.3%, not the expected 1.5%. However, further rise in the GBP/USD price is expected as the USD is still getting weaker.
