FX.co ★ GBP/USD intraday technical levels and trading recommendations for September 4, 2013

Strong bullish pressure was seen during retesting 50% Fibonacci, resulting in bullish engulfing candlestick extending further above 1.5400 (61.8% Fibonacci). This opened the way directly to 76.4% Fibonacci around 1.5550 which constituted temporary intraday resistance that held the price below for 5 days before bullish breakout took place on August 15.

The cable established ascending bottoms around 1.4800, 1.5100, 1.5210 and recently 1.5420, those bottoms have been supporting the ongoing uptrend so far.

Key Supply Zone is placed near 1.5750 and would be a clear target area for anyone buying this market. However, bearish rejection around 1.5590 (a possible level for the right shoulder of the expected Head and Shoulder's pattern) has been witnessed for two days until today.

If the bulls manage to keep the price above 1.5590 until the daily closure, the market will be shooting for 1.5690 and 1.5750.

Based on the chart above, the cable was trending up within the depicted ascending wedge, the upper limit of which is around 1.5690-1.5700 provided significant supply supported by the overbought state of the pair.

Bearish pressure was applied to visit the minor uptrend line located around 1.5560 which was broken down opening the way towards 1.5540 (76.4% Fibonacci Level and a previous broken top).

The price level of 1.5530 was a prominent target for the sellers off 1.5690. However, fixation below 1.5540 enabled the bears to push towards 1.5430 where an ascending uptrend line came to meet the pair providing a valid BUY entry with SL located below 1.5430.

Yesterday, the Organization for Economic Cooperation and Development (OECD) raised growth forecasts for the United Kingdom while lowered expectations about the possibility of having more economic growth in the United States. This lead to another bullish push above yesterday's high (1.5602).

Fixation above 1.5600 is vital for the bulls to keep pushing higher especially after we had an inverted hammer 4H candlestick off 1.5630.