It rallies to the 1.3400 region as the bulls target channel resistance

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  • GBP / USD is moving higher during the first half of trading action on Thursday.
  • The technical setup favors the bulls and supports the prospects for additional earnings.
  • Only a sustained break below the 1.3285-80 region will negate the positive bias.

The GBP / USD pair has regained positive traction on Thursday and has built on the late bounce of the previous day from levels below 1.3300. The pair has now rallied towards the 1.3400 region and the bulls are now pointing to a move towards the three-month highs set earlier this week.

From a technical perspective, the recent move up from the 1.2675 region, lows touched on September 23, has been made along an upward sloping channel and points to a well-established uptrend. This, along with the emergence of some buying near the 1.3285-80 region, supports the prospects for an extension of the move to the upside.

The positive outlook is further reinforced by the fact that the technical indicators on the daily chart maintain their bullish bias and are still far from being in overbought territory. That said, the inability of the GBP / USD pair to break through the channel resistance warrants some caution before opening new aggressive bullish positions.

The mentioned barrier is currently near the 1.3440 region. If decisively outperformed it will be seen as a new trigger for the bulls and will pave the way for additional gains. The GBP / USD pair could then break above the September monthly highs around the 1.3480 area and aim to regain the key psychological level of 1.3500.

On the other hand, immediate support is near the 1.3370-65 region. Any drop below that level could still be seen as a buying opportunity near the round 1.3300 level. This, in turn, should help limit the decline near the 1.3285-80 horizontal support. If it falls below that level, the constructive configuration will be canceled and could generate some technical sales.

GBP / USD daily chart


GBP / USD technical levels


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