The Great Britain pound versus the US dollar currency pair, although it was indecisive, seems to be searching to channel its momentum towards a direction. Will this be the continuation of the appreciation?
After the rally from the 1.1409 low to the 1.2647 high, the price began shaping an ascending trend. The new trend performed very well in terms of facilitating the bulls in gaining ground.
In fact, the bulls were determined enough so that they managed to push the price right under the firm 1.3261 level, coining the 1.3267 high and placing the price above the upper trendline of the ascending channel.
However, the 1.3261 area is a strong resistance, and, as a result, the bullish attempts to pass it were met by very prompt bearish responses.
So, even if the bears won the battle in the short-term, the bulls still have chances. In other words, even if 1.3261 held as resistance, the resulting depreciation may very well be limited by the 1.3000 intermediary and psychological level. So, as long as 1.3000 remains a valid support, the bulls can challenge 1.3261, which, if it gives way, paves the path to 1.3502.
On the other hand, if 1.3000 is invalidated, then the price could be directed towards the 1.2777 level. However, considering the 1.2818 high and the fact that the main trend is an ascending one, 1.2777 may see bullish reinforcements, as they would join the market at better prices.
The rally from 1.2644 touched the major 1.3269 resistance level but went beneath the 1.3157 level that limited the appreciation from 1.2644 in the first place.
So, one possible scenario is the one in which the bulls regain 1.3157, which, in turn, offers them another chance to validate 1.3268 as support. This can happen from around the current area — as of the time of writing, the price is oscillating at 1.3100 — or after another retest of 1.2983.
If 1.2983 fails, then the bears could send the price towards the next important support level, 1.2783.
Levels to keep an eye on:
D1: 1.3200 1.3261 1.3502 1.2777
H4: 1.3157 1.3268 1.2983 1.2783
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