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Forex Analysis: GBP/USD Rebounds Off Key Support Confluence

GBP/USD Daily Chart

GBP/USD (daily chart) has rebounded off a confluence of key support factors that includes both a bullish support trend line extending back to the June 1.5265 area low as well as the 200-day moving average. For now, this bounce has preserved the prevailing bullish trend by respecting the strong support confluence, and has tentatively pushed back up above the 1.5900 resistance level. If GBP/USD is able to stay above the support provided by the moving average and the uptrend line, price could be positioned to sustain the bullish trend that has been in place for nearly half a year. In this event, the major potential resistance objectives to the upside include the key 1.6000 and 1.6150 levels. To the downside, any subsequent breakdown of this support confluence could find further potential support around the 1.5750 and then 1.5600 levels.

James Chen, CMT
Chief Technical Strategist
FX Solutions

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James Chen

James Chen

James Chen is Chief Technical Strategist for City Index Group. He is also a Chartered Market Technician. He is the author of the books: "Essentials of Foreign Exchange Trading" (John Wiley & Sons, 2009) and "Essentials of Technical Analysis for Financial Markets" (John Wiley & Sons, 2010). Mr. Chen writes currency analysis, leads forex trading seminars and has appeared in numerous major financial media outlets, including CNBC, Bloomberg TV, Forbes, Reuters, Dow Jones, and the Associated Press.