GBP/USD Gains Should Continue

GBP/USD INTRADAY CHART

GBP/USD Hourly Chart

BIAS: Gains should continue, but allow for the risk of early consolidation

Resistance: 1.5650-60 1.5674 1.5686-03 1.5731Support: 1.5620 1.5590 1.5576 1.5556

MAIN ANALYSIS: The rally stalled midway in the 1.5665-86 target area for a correction that was deeper than expected – reaching 1.5576. I am rather suspicious about this, and feel there is a risk of a triangle developing between 1.5590 and 1.5650-60. If 1.5590-95 is reached early in the day and bounces, this would raise the likelihood of the triangle. Directly above 1.5665-74 would see gains resume. As mentioned yesterday, this should see a rally to 1.5797. However, this would be difficult if the rally resumed directly. With a triangle, there is more chance of reaching that target. Basically, there is a target range between 1.5763-97, and anywhere in this range will be fine.

COUNTER ANALYSIS: A break below 1.5576 and 1.5550 would concern and suggest a move back down to the 1.5450 low – and could suggest that the uptrend is over…

MEDIUM TERM ANALYSIS:13th July: We are seeing constructive gains, and this should see a temporary correction from the 1.5570-1.5625 area. Once that correction is complete, the next rally needs to reach the 1.5763-97 area.

Only back below 1.5400 would bring some concern.

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