The Great Britain pound versus the US dollar managed to confirm 1.2514 as support and start a departure from it. Is 1.2777 a possible turning point?
Long-term perspective
The rally that started from the 1.1409 low — even if hampered by the firm 1.2514 area — managed to continue, taking the shape of an ascending trend, as highlighted in the chart.
The fact that the bulls managed to overcome the 1.2514 resistance twice — firstly after the appreciation that confirmed the 1.2092 level as support and secondly from the 1.2251 low — ensured their ease in conquering it.
As a result, even if the bears tried to halt the appreciation by printing the bearish engulfing candlestick pattern on July 13, the bulls turned the situation in their favor, using the 1.2514 level as a springboard to project a new upwards movement.
Considering this context, the rise from the 1.2251 low may be seen as an impulsive swing of the ascending trend that started after the 1.2092 level was confirmed as support and which is contained within the boundaries of the ascending channel.
As a result, the impulsive swing can be stopped by the 1.2777 intermediary level — or at least this might be the first area for the bulls to book their profits — which may, in turn, send the price back to 1.2514. However, as an impulsive swing usually does, it may very well continue, aligning with its “mission” to print a higher high, around the double resistance area defined by the 1.3000 psychological level and the upper line of the ascending channel.
Short-term perspective
From the 1.2251 low, the price is in an ascending movement. The rise extended until the 1.2669 high, from where the decline to the 1.2481 low defined the base of a symmetrical triangle.
The triangle, a continuation chart pattern, already played its role, as the price pierced its resistance. In the current situation, the price could either throwback to the double support made possible by the 1.2612 level and the trendline that starts from 1.2669 or simply continue to rise until 1.2783, the first bullish objective.
Only a fall under 1.2612 exposes the intermediary level of 1.2525.
Levels to keep an eye on:
D1: 1.2777 1.3000 1.2514
H4: 1.2612 1.2783 1.2525
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