GBP/USD 1H Chart 7/19/2012 7:10AM EDT
The GBP/USD consolidated this week as is tested a declining trendline that connected 6/20 and 7/2 highs. The 1H chart shows price action was in a triangle, and the RSI was stuck between 40 and 60. The GBP/USD broke above this congestion pattern during the 7/19 European session, pushing price to 1.57, and the 1H RSI above 60.
In the very short-term, this breakout opens up the 1.5726 and 1.5780.If we get resistance from 1.5780 and the market falls, it will be interesting to see if the market will respect the broken pattern as support.
Visually, if the market can stay above the middle of the pattern around 1.5560, I think the bulls are still in charge. It would be even more clear if it stays above 1.56, and the 200SMA in the 4H chart. In this case, we can look for a more aggressive bullish outlook beyond the very short-term.
GBP/USD 4H Chart 7/19/2012 7:13PM EDT
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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