GBP USD Technical Forex Analysis for Forex Traders

The Pound dropped modestly on Friday, reaching 1.5441 before consolidating, and closing, above 1.55. Although the bounce we have seen from last week’s low is still small relatively to the drop if followed, and although this bounce did not make it to the first Fibonacci retracement level of 38.2%, we believe that it has a chance as long as it holds above 1.5441. The Pound is required to hold above this level, and then shoot up to test the resistance 1.5587. We do not recommend taking sides before the price leaves this “neutral zone” we see between 1.5441 & 1.5587. Therefore, today will be very significant for determining the next phase’s direction. And we will be before two scenarios: first, a break of 1.5441, in this case the rise from 1.5370 will be purely a correction. And if we fall below this support, it will be completely logical to expect a heavy dive targeting 1.5320 & 1.5238. The second scenario is holding above 1.5441, and then attacking 1.5587. If we succeed in breaking it, we will be already on the way to the most important resistance for the time being 1.5757. And if this one is also broken 1.5860 will be just an initial and modest target on the way up.

Support:

• 1.5441: the rising trend line from last week’s low.

• 1.5320: Fibonacci 38.2% for the massive move up from 1.4227 to 1.5996.

• 1.5238: Jul 8th high.

Resistance:

• 1.5587: the falling trend line from Aug 16th top.

• 1.5757: Fibonacci 61.8% for the drop from Aug 6th major top.

• 1.5860: a very exciting resistance appearing on the hourly chart.