Chart GBP/USD Update: Smart bounce
Cautious trade has given way to a steady reversal higher
| Level | Comment | Level | Comment | |||||
|---|---|---|---|---|---|---|---|---|
| R4 | 1.3575 | * | 26 Feb (w) high | S1 | 1.3450 | ** | congestion | |
| R3 | 1.3560 | ** | 50% ret of Jan-Mar fall | S2 | 1.3400 | ** | congestion | |
| R2 | 1.3500 | ** | congestion | S3 | 1.3300 | * | congestion | |
| R1 | 1.3485 | * | 38.2% ret of Jan-Mar fall | S4 | 1.3287 | * | 9 Dec (w) low |
Asterisk denotes strength of level
08:10 GMT - Cautious trade has given way to a steady reversal higher, with the break above 1.3450 reaching resistance at the 1.3485 Fibonacci retracement. Flat overbought intraday studies are prompting short-term reactions around here. But both daily stochastics and the daily Tension Indicator have turned higher, highlighting room for a later break. Focus will then turn to congestion around 1.3500, with room for continuation towards the 1.3560 retracement and the 1.3575 weekly high of 26 February. However, negative weekly charts should limit any tests of 1.33560/75 in profit-taking/consolidation. Meanwhile, a close back below congestion support at 1.3450 will stabilise sentiment and prompt consolidation around further congestion at 1.3400.