Will the 1.3000 Support on GBP/USD Hold?

The Great Britain pound versus the US dollar currency pair seems to be in a mixed-mode. But is it really so?

Long-term perspective
After the rally that started from the 1.1409 low and the setback that limited further advancement beyond 1.2514, the price began an ascending trend which managed to print the 1.3175 high. It is important to be noted that the high finds itself beyond the resistance trendline of the ascending channel. This could translate into an overextension from the bullish side, which, as an effect, could trigger a firm bearish response.
Indeed, on July 31, the bears did just that, printing a pin-bar. Usually, such development is followed by a strong decline. However, it seems that the candle that followed, on August 3, is a Doji, which cannot be a better way of saying that the market is directionless. But this could go two ways.
The first scenario is the one in which the market participants consider the Doji validating the 1.3000 psychological level as support. The confirmation of this scenario translates into the 1.3175 peak being taken out. If this happens, then the path to 1.3261 is open.
The second scenario postulates for the appreciation from 1.3000 — which happens to take the form of a Doji — to represent a better positioning for the bears as they prepare better prices to short the market from. In this case, the first target is represented by 1.3000, which if it is pierced and confirmed as resistance, leads the way to the 1.2777 intermediary level.

Short-term perspective
From the 1.2481 low, which defines the base of the symmetrical triangle chart pattern, the price continued the appreciation, almost touching the 1.3175 firm resistance level.
From 1.3175, the price retraced, considering 1.2983 as support. So, one possibility is to see range trading bound by 1.3175 and 1.2983, respectively.
If the resistance cedes, then the 1.3200 psychological level (not highlighted on the chart) represents the first target. On the other hand, if the support gives way, then 1.2876, followed by 1.2783, serve as targets.

Levels to keep an eye on:

D1: 1.3000 1.3261 1.2777
H4: 1.3175 1.2983 1.3200 1.2876 1.2783

If you have any questions, comments, or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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