GBP/USD a decisive positive candle forming to leave support around $1.3050
Our preference: long positions above 1.3141 with targets at 1.3185 & 1.3243 in extension.Alternative scenario: below 1.3117 look for further Downside with 1.3084 & 1.3043as targets.
The near term outlook has taken on an increasingly uncertain configuration in recent sessions.
However, taking a step back and we continue to view support around $1.2900/$1.3000 on a medium term basis as a buying
opportunity. Ongoing positive configuration on momentum (RSI above 40, MACD lines above neutral,
Stochastics rising above 50) suggests that corrections remain a chance to buy.
Yesterday’s reaction only adds to that view,
with a decisive positive candle forming to leave support around $1.3050. However,
looking on the hourly chart there is a lack of conviction,
as the hourly RSI oscillates between 30/70 (turning back from 70 again) whilst the MACD and Stochastics lines both post
bear crosses. It suggests a lack of traction follow through from yesterday’s rebound.
Above initial resistance at $1.3180 would test the 23.6% Fibonacci retracement (of $1.2192/$1.3515) around $1.3200,
but the key near term resistance is at $1.3285.