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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