FX.co ★ Blackpink | GBP/USD

GBPUSD has seen a sharp rise on its daily chart and now sits at levels of 1.3660 following a break above the 1.3500 to 1.3550 resistance zone. The recent candlesticks demonstrate strong bullish momentum as prices have broken above swing high points and remain comfortably above the key moving average levels. While the short-term trend picture remains bullish, the fast move up has created room for retracement. The near-term resistance zone starts at 1.3660, which acts as a previous support zone for prices. A decisive break above this zone may allow prices to target levels of 1.3700, then 1.3750 and ultimately reach January's high of 1.3830. But the failure of bulls on price action near 1.3660 may lead to some take profits ahead of another rally. The momentum indicators show clear signs of bullishness. The MACD is currently above the zero line and is increasing, and the same is happening for its histogram. The RSI stands at 72, which places it in the overbought region. However, an overbought position does not necessarily mean there will be a trend reversal, yet the probability of consolidation is higher since it occurred after an advance phase. The Stochastic oscillator stands at 90, which shows strong momentum. Also, the wider pattern supports the buyer as Price has once again captured the moving average zone and is making higher-highs on the charts. However, any bearish daily candle formation at resistance would serve as a signal of fatigue. It's important for the traders to look for closing prices instead of chasing the rally. The support levels are currently at 1.3550 and 1.3500 and then the moving average zone at 1.3440-1.3400. A sustained move below 1.3500 on a daily basis would damage this setup and make the level 1.3440 vulnerable. All in all, it can be stated that GBP/USD is decidedly bullish; however, high momentum oscillators indicate that it would be wise to trade with caution for a correction move.