Technical analysis of GBP/USD for August 01, 2016
The GBP/USD pair is showing signs of strength following a breakout of the highest level of 1.3156. On the H1 chart. the level of 1.3156 coincides with 23.6% of Fibonacci, which is expected to act as minor support today. Since the trend is above the 23.6% Fibonacci level, the market is still in an uptrend. But, major support is seen at the level of 1.3056. Furthermore, the trend is still showing strength above the moving average (100). Thus, the market is indicating a bullish opportunity above the above-mentioned support levels, for that the bullish outlook remains the same as long as the 100 EMA is headed to the upside. This is confirmed by the RSI indicator signaling that we are still in the bullish trending market. Now, the pair is likely to begin an ascending movement to the point of 1.3175 and further to the level of 1.3218. Therefore, strong support will be found at the level of 1.3156 providing a clear signal to buy with a target seen at 1.3268. If the trend breaks the minor resistance at 1.3268, the pair will move upwards continuing the bullish trend development to the level 1.3318 in order to test the daily resistance 2. However, it would also be sage to consider where to place a stop loss; this should be set below the second major support of 1.3056.