FX.co ★ GBP/USD Intraday Technical Analysis ( Channel Breakout Opportunity ) December 2, 2011

In the period 11-25 November, GBP/USD currency pair was trending down inside a bearish channel which is marked on the chart.

Finally the pair found support at 1.5420 which prevented further decline of the pair price.

On Wednesday, we had a strong bullish breakout of our steep bearish channel which stopped at 38.2% Fibonacci level around 1.5700.

We should note that the pair has a strong resistance at 1.5870-1.5910 where the lower limit of previous congestion zone, previous lows & Fibonacci level 61.8% are located.

Yesterday we didn't have something significant as the daily candlestick came "High Wave" indicating balance of bulls and bears. But only its low at 1.5636 should be watched for a possible retest.

On the 4H chart, We can obviously see the bullish breakout of the mentioned bearish channel with very strong successful retest.

This week the pair established an intraday support level at 1.5620 which may be retested giving a good LONG entry.

If the pair didn't quite reach our mentioned support at 1.5620 then Yesterday's daily low at 1.5636 may be a good LONG entry.

Also the previously mentioned resistance at 1.5870-1.5910 is marked on the chart.

Based on the previous analysis

We suggest having a LONG position at the retest of support level 1.5620 or 1.5636 [TP at 1.5670, 1.5750, 1.5790 then 1.5860 & SL placed below 1.5520].

If the pair resumes its upside movement, then we can have a short position at 1.5870-1.5910 [TP at 1.5800 & 1.5710 & SL placed above 1.5940].