FX.co ★ Technical analysis of GBP/USD for August 19, 2016

I warned the GBP/USD bears that a bounce towards 1.32 was imminent after a breakout of the bullish wedge formation that started on August 3rd. The price has broken out and above the wedge and has reached the 61.8% Fibonacci retracement of the decline.

The blue lines - bullish wedge

The price has reached the 61.8% Fibonacci retracement of the decline which is an important juncture point. A bearish reversal may start from this area. Next resistance is the 78.6% Fibonacci retracement. Support is at 1.3070.

A break above 1.3260-1.3350 could push the price towards 1.35-1.36 and the weekly cloud resistance area. This is a sell area, and bears are not going to give up easily. I believe the US dollar will strengthen against the pound again, and we will see another round of selling that will eventually push the pair towards 1.25.