British Pound Forecast: GBP/USD Holds Above Channel Resistance
GBP/USD holds above channel resistance as it trades to a fresh yearly high (1.2924).
Written by
David Song
Strategist
British Pound Outlook: GBP/USD
GBP/USD holds above channel resistance as it trades to a fresh yearly high (1.2924), and the exchange rate may attempt to test the November high (1.3048) as it carves a series of higher highs and lows.
British Pound Forecast: GBP/USD Holds Above Channel Resistance
Keep in mind, the recent rally in GBP/USD pushed the Relative Strength Index (RSI) into overbought territory for the first time since September, and the move above 70 in the oscillator is likely to be accompanied by a further advance in the exchange rate like the price action from last year.
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In turn, GBP/USD may continue to reflect a bullish trend as the ascending channel from earlier this year remains intact, but the RSI may show the bullish momentum abating if it fails to hold above 70.
With that said, GBP/USD may consolidate over the remainder of the week if it struggles to hold above channel resistance, but the exchange rate may attempt to further retrace the decline from the November high (1.3048) as it carves a bullish price series.
GBP/USD Price Chart –Daily
Chart Prepared by David Song, Senior Strategist; GBP/USD on TradingView
- GBP/USD holds above the ascending channel from earlier this year after clearing the December high (1.2812), with a close above the 1.2900 (23.6% Fibonacci retracement) to 1.2910 (50% Fibonacci extension) area raising the scope for a move towards 1.3010 (61.8% Fibonacci extension).
- Next area of interest comes in around the November high (1.3048), but lack of momentum to close above the 1.2900 (23.6% Fibonacci retracement) to 1.2910 (50% Fibonacci extension) area may push GBP/USD back towards 1.2820 (38.2% Fibonacci extension).
- Failure to defend the 1.2710 (23.6% Fibonacci extension) to 1.2760 (61.8% Fibonacci retracement) zone may lead to a test of channel support, with the next area of interest coming in around the monthly low (1.2579).
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--- Written by David Song, Senior Strategist
Follow on Twitter at @DavidJSong
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