The British Pound (GBP) has shown impressive strength against the US Dollar (USD) recently, extending its upward move from 1.2612 to reach a high of 1.2845. However, the pair is now facing resistance at the 1.2860 level, which could lead to a period of consolidation.
Short-Term Outlook
After reaching 1.2845, we’ve seen a pullback, suggesting that a consolidation phase for the recent uptrend is underway. In the coming days, we can expect range-bound trading between two key levels:
- Support: 1.2740
- Resistance: 1.2845
Bullish Scenario
As long as the 1.2740 support holds, the overall uptrend remains intact. After this consolidation period, we could see another push higher to test the 1.2860 resistance level.
Key Levels to Watch
Resistance levels:
- Initial resistance: 1.2825
- If broken, watch for: 1.2845
- Above that: 1.2860
- Next target: 1.2900
Support levels:
- Initial support: 1.2760
- If broken, watch for: 1.2740
- Below that: 1.2710
Trading Strategy
Traders might consider:
- Looking for buying opportunities near the 1.2740-1.2760 support zone
- Taking profits or tightening stops as the pair approaches the 1.2845-1.2860 resistance area
- Being cautious of a potential breakout above 1.2860, which could signal a continuation of the broader uptrend
Remember to always use proper risk management techniques and consider multiple timeframes when making trading decisions based on this analysis.