Note:All indicators for the overall outlook and forecast of GBP/USD are based on the daily forex charts and in some cases 4-hourly or weekly charts.
" (2 weeks back) After 3 months the pair broke over the daily Ichimoku cloud and Friday's fall found support exactly at the upper edge of the cloud. This indicates that the possibilities of further gains still remains in the picture if support near 1.5320 holds. A decisive break above 1.5422 and more importantly 1.5450 is required to expect further consolidation for a test of the psychological 1.5500 level ."
British Pound - US Dollar (GBP/USD) rose very strongly from 1.5197 and went as high as 1.5499 before closing for the week at 1.5475.
The highlights of the recent price action was first a break above 1.5411 and then the 38.2% level of the downward move from 1.6381 to 1.4831. This level was at 1.5422 and the price action was finding resistance below this since April 1st week. Please check this GBP/USD chart alert for the same.
The above points indicate that further gains are strongly expected in the near term but for that a break over 1.5500 psychological level is critical. The psychological pressure of 1.5500 has already come into the picture and that is clear from the resistance just 1 pip below that i.e. at 1.5499. With the support near 1.5411, any decisive break over 1.5500 should target the 50% retracement level of the above mentioned move i.e. towards 1.5600 first and then possibly towards the 200-day moving average i.e. 1.5711. We expect a strong resistance near 1.5711 even if an attempt towards the 61.8% retracement i.e. 1.5788 is made.
The above outlook will remain in picture if the support near 1.5411 holds. In case the resistance near 1.5500/1.5520 holds and a break below 1.5411 takes place then the near-term outlook for GBP/USD will turn neutral and in such a case we would expect further downward move first towards 1.5300 (current 55-day EMA support) and then possibly towards a retest of the recent 1.5197. Overall till the support at/over 1.5197 holds we expect to see further gains.
However a break below 1.5197 will change the immediate outlook towards bearish side. Please note that the current upward gains are considered as a consolidation during the downtrend and overall we are not ignoring a possibility for a test of 1.4500 in the near future.
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