- GBP/USD edged higher through the first half of the trading action on Thursday.
- The set-up favours bullish traders and supports prospects for additional gains.
- Only a sustained break below the 1.3285-80 region will negate the positive bias.
The GBP/USD pair regained positive traction on Thursday and built on the previous day’s intraday bounce from sub-1.3300 levels. The pair has now reclaimed the 1.3400 mark, with bulls now eyeing a move towards three-month tops set earlier this week.
From a technical perspective, the recent move up from the 1.2675 region – lows touched on September 23 – has been along an upward sloping channel and points to a well-established bullish trend. This, along with the emergence of some dip-buying near the 1.3285-80 region, supports prospects for an extension of the appreciating move.
The positive outlook if further reinforced by the fact that technical indicators on the daily chart maintained their bullish bias and are still far from being in the overbought territory. That said, the GBP/USD pair’s inability to break through the channel resistance warrants some caution before placing aggressive bullish bets.
The mentioned barrier is currently pegged near the 1.3440 region, which if cleared decisively will be seen as a fresh trigger for bullish traders and pave the way for additional gains. The GBP/USD pair might then surpass September monthly swing highs, around the 1.3480 area, and aim to reclaim the key 1.3500 psychological mark.
On the flip side, immediate support is now pegged near the 1.3370-65 region. Any subsequent fall below might still be seen as a buying opportunity near the 1.3300 mark. This, in turn, should help limit the downside near the 1.3285-80 horizontal support, which if broken will negate the constructive set-up and prompt some technical selling.
GBP/USD daily chart
Technical levels to watch
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