Technical Analysis – GBPUSD continues rally to new 8-week high
GBPUSD managed to break above and close above the 23.6% Fibonacci retracement level of the 1.7190 to 1.4949 fall. This level comes in at 1.5477. The corrective move higher continues after bouncing from this multi-month low and prices reached a high of 1.5551 by early Thursday, hitting a fresh 8-week high.
There is a likelihood for further upward momentum as prices have moved above the top of the cloud and the RSI has entered bullish territory above 50. Also the tenkan-sen line has crossed above the kijun-sen line, giving a bullish signal. As long as the market remains supported above the key 1.5500 level the bears have lost control for now. The next target would be the 38.2% Fibonacci at 1.5804.
In the bigger picture however, looking at the monthly chart, the long term trend remains bearish and the recent move is seen as a correction. As such, the pair has scope to resume the downside, with the next support level coming in at 1.5200 and below this, the pair would fall to retest the 1.4949 low.
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