Previous: GBP/USD Has 1.55 In Sight in the Short-term (7/23)

GBP/USD 1H Chart 7/24/2012 7:43AM EDT

The GBP/USD reached 1.55, and pushed below it to 1.5490 in the 7/23 US session. Then the market started trading sideways, with resistance holding through the 7/24 session at 1.5540. This consolidation range comes after a sharp sell-off that began last Friday 7/20, from about 1.5740.

If the market breaks the 1.5540 level during the 7/24 US session, it basically completes a double bottom. The near-term bullish outlook extends another 50 pips toward 1.5590, which is in confluence with the 200-hour simple moving average, which reflects mean price action. Note that the 38.2% retracement of the 1.5740-1.5488 swing is at about 1.5585.

However if the short-term outlook continues, and the market pushes below 1.5488, we have the 1.54 pivot to test in the near-term as support before exposing the 2012 low near 1.5280.

GBP/USD 7/24/2012 4H Chart 7:47AM 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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