GBP/USD
It was during the latter portions of December 2017 that I started to notice a Pattern...one which I thought I knew but which I had to check. It was a Bullish 'Cup and Handle' Pattern and it did check out. It indicated a try up to the 1.4040 area and initially...it did nothing.
Take a look at the Daily Chart above and you'll see how the market was not racing away upwards. It did this for about two weeks...almost forming a Bull Flag. Then it took off on the Upside around mid-January. By late January we'd run up through the target 1.4040 area and over extended. We took out individual levels of resistance above - as long as they were individual levels of resistance. We then ran into an Area of Congestion based around 1.4350 - 1.4650...and we stopped, or have done at this time. The key underpinnings are the old 1.4040 area plus the recent 50% Fib at 1.3898...both these are key.
What happens now will be interesting. It looks likely that the market will test up again into the band of resistance. How well it will manage, I'm not sure as the resistance which goes back to May 2016 is many banded. I know that it will rely more on attrition in wearing out the Bullish incentive rather than a straight Bearish brick wall that will see the market crash into it and fall off. Hence I think that is why at the moment the move higher is cautioned and relatively slow compared to last week.
On the Downside, look out for consecutive closes under 1.4003 and especially 1.3898 to warn of at least a temporary change in sentiment.
Support is currently at 1.4145, 1.4072, 1.4040, 1.4003, 1.3977, 1.3942 and 1.3898.
Resistance is currently at 1.4285, 1.4350, 1.4383, 1.4446, 1.4526, 1.4575, 1.4600, 1.4640 and 1.4722 - 1.4736.
With all MAs pointing higher it seems incumbent to move the bullet point into fully Bullish.
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