- GBP / USD stops the positive movement again near the resistance of the ascending channel.
- The technical setup favors the bulls and supports the prospects for lower level buying to emerge.
- A sustained break below the 1.3200 level is needed to nullify the short-term bullish outlook.
The GBP / USD pair has returned a portion of its daily gains to the 1.3380 region and has once again witnessed a modest pullback from the upper end of a two-month-old uptrend channel. The inability of the pair to break the resistance of the channel warrants some caution for the bulls.
However, the fact that the GBP / USD pair has managed to hold above the resistance breakout point, now turned into support, at 1.3310-1.330 makes the short-term bias appear tilted in favor of the bulls. Therefore, a pullback towards the mentioned region could still be seen as a buying opportunity.
Meanwhile, the technical indicators on the daily chart have maintained their bullish bias and further support the outlook for the emergence of some lower level buying. With that said, some continuation weakness below the 1.3300 level could spark some technical selling.
The GBP / USD pair could accelerate the retracement slide towards the horizontal support at 1.3265-60 before finally falling to test the round level of 1.3200. Failure to defend the mentioned support levels will negate the constructive outlook in the short term.
On the other hand, the bulls could now expect sustained strength above the 1.3400 level to confirm a breakout of the trend channel. Momentum could push GBP / USD towards September highs around the 1.3480 region on its way to the key psychological level of 1.3500.
GBP / USD daily chart
GBP / USD technical levels
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