The Pound managed to climb over the minor resistance line at the beginning of the week, and traded in a narrow range between 1.5472 and 1.5520. It finally made the breakout above this major hurdle. By the end of the week, it also made an attempt to cross 1.5720, but bounced back to close at 1.5688.
Note that some higher lines were added on last week�s outlook. The Pound now ranges between 1.5520, which turned into a strong support line, and 1.5720, which was the bottom in October 2009.
Higher, 1.5833 is a very strong line of resistance � it supported the Pound before the collapse in February, and also worked as a resistance line immediately afterwards. Higher, 1.6080 is a minor resistance line after being a swing high in February.
Even higher, 1.6270 worked as a support line when the Pound traded at higher ground, and now works as resistance. It�s followed by 1.6450.
Looking down below 1.5520, the 1.5470 line now works as minor support. It�s followed by 1.5350, a pivotal line many times in the past. Below, 1.5230 and and 1.5130 worked as support and resistance lines in July, and cushion the pair now.
Lower, 1.5050 capped a recovery attempt in May and now works as resistance. It�s followed by 1.4870, a support line in June, and 1.4780, which supported the Pound on the big collapse in May.
I continue being bullish on GBP/USD.
After getting a boost from the GDP, Mervyn King also began hinting that a rate hike will come, supplying more fuel for Pound bulls. After breaking above 1.5520, there�s still lots of room for rises.
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