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  • GBPUSD seems to be creating a bull flag on the hourly chart.  
  •  A breakout, if confirmed, could yield a rally to 1.3242.

GBP/USD is reporting marginal gains at 1.3040 at press time, having dropped 0.20% on Thursday.

More importantly, the pullback from the high of 1.3102 reached  on May 1 has taken the shape of a bull flag, as seen on the hourly chart. That pattern essentially represents a pause, which usually refreshes higher.

A move above the upper edge of the flag, currently at 1.3060, will confirm a flag breakout and would create room for a rally to 1.3242 (target as per the measured move method) – more so, with the daily chart reporting a falling wedge breakout (bearish-to-bullish trend change).

The bullish case, however, would weaken if the pair falls below the 200-day moving average support, currently at 1.2984.

Hourly chart

Daily chart

Trend:  Bullish 1.3060

Pivot points