GBP/USD jumped to a 16-week high during today’s European session, challenging the 1.3620 price level. The price has been moving in an uptrend since March 2017 confirmed by higher peaks and higher bottoms.
Prices broke above 1.3610 and are trading above their medium-term simple moving averages (50, 100 and 200). The bullish picture in the short to medium-term is further supported by the momentum indicators. The MACD oscillator is trying to climb above its trigger line in the bullish area, whilst the RSI indicator is following the bullish path.
Further gains should see the February 2016 high of 1.3820 act as major resistance. However, the pair would first need to surpass the 1.3610 – 1.3655 significant area, with 1.3655 being the 15-month top achieved in September 2017.
In the event of a downside reversal, the 1.3300 psychological level could act as a barrier before being able to penetrate the ascending trend line. A break below the aforementioned diagonal line would take the price to the next support at 1.3220.
by Selena Nicholas, XM Investment Research Desk