GBP/USD: Monthly and Daily Support Could Encourage Buyers North
Looking at GBP/USD from a technical point of view, it is clear the pairing is higher in the long term, recently forging a fresh YTD high at US$1.3267.
Monthly Chart: Scope for Further Buying
Based on the monthly timeframe, the fresh high positioned price north of resistance coming in at US$1.3111, which could now deliver support to the market. The next port of call for the monthly chart can be seen at resistance from US$1.3483; therefore, assuming US$1.3111 holds as support, further outperformance could be on the table.
Daily Chart: Holding at a Decision Point
The daily timeframe is interesting, as the unit trades from a decision point zone at US$1.3081-US$1.3130 formed before breaking the US$1.3142 peak established in mid-2023. As a result, this is an important zone from a technical standpoint and is currently holding ground.
H1 Chart: Breakout Higher Could Trigger Buyers
Looking at things from a shorter-term perspective on the H1 timeframe, a descending channel is in play, extended from the YTD high of US$1.3267. With the currency pair unable to venture south of the US$1.3110 lows fashioned last Friday (black arrows) and price action now seen breaking out above channel resistance, this could trigger GBP demand, backed by the monthly chart trading above resistance and the daily chart testing a decision point zone.
Monthly Chart: Scope for Further Buying
Based on the monthly timeframe, the fresh high positioned price north of resistance coming in at US$1.3111, which could now deliver support to the market. The next port of call for the monthly chart can be seen at resistance from US$1.3483; therefore, assuming US$1.3111 holds as support, further outperformance could be on the table.
Daily Chart: Holding at a Decision Point
The daily timeframe is interesting, as the unit trades from a decision point zone at US$1.3081-US$1.3130 formed before breaking the US$1.3142 peak established in mid-2023. As a result, this is an important zone from a technical standpoint and is currently holding ground.
H1 Chart: Breakout Higher Could Trigger Buyers
Looking at things from a shorter-term perspective on the H1 timeframe, a descending channel is in play, extended from the YTD high of US$1.3267. With the currency pair unable to venture south of the US$1.3110 lows fashioned last Friday (black arrows) and price action now seen breaking out above channel resistance, this could trigger GBP demand, backed by the monthly chart trading above resistance and the daily chart testing a decision point zone.
Note
Despite the downside move - triggered by the US ISM report - this remains a noteworthy market to keep an eye on; as long as daily price remains within its decision point, this could lead to a more spirited breakout higher on the H1 - AH. Note
Price eventually broke out to the upside, as expected. The break of H1 channel resistance provided a good signal to enter long! AH
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