Bull Signal in GBP/USD Now in Place

The FX Specialist view - When we last looked at GBP/USD the chart had tested a long term 76.4% retracement level, where the initial reaction had been positive. But the required bullish signals from the Daily chart were not in place – and they are now.

• WEEKLY CHART: The 76.4% pullback has provided good support so far, and the chart structure now suggests that, s/term dips notwithstanding, higher values can be seen.
• DAILY CHART: The earlier breach of the 23.6% recovery level followed by recent violations of the bear channel top projection and 1.5125 area have provided a bull signal for us, in the FX Specialist Guide. S/term dips are now more likely to be temporary ahead of a further bull leg. Note first support coming from the prior 1.4780 support/resistance. A deeper slip would turn focus on the 1.4500 area. On the upside, beyond the nearby 38.2% level just above 1.5300, note the stronger resistance at 1.5635/ 1.5705, 50% (a good level in GBP sometimes) and 13-Oct low.

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