With a recovery momentum underway, there is risk of price extension with eyes on the 1.6516 level, the Jan 10 2014 high for GBP/USD. A decisive break and hold above this level will pave the way for a run at the 1.6603 level, its Jan 02’2014 high.
Further out, a breach of the 1.6603 level will open the door for additional strength towards the 1.6650 level. Further out, a turn above here will trigger its medium term uptrend resumption towards the 1.6700 level followed by the 1.6750 level and possibly higher towards the 1.6800 level.
Its daily RSI is bullish and pointing higher suggesting further strength. On the other hand, on any pullback, support stands at the 1.6400 level where a break will turn focus to the 1.6350 level and subsequently the 1.6300 level. Further down, support comes in at the 1.6259 level. On the whole, GBP continues to retain its medium term upside bias.
Guest post by FX Tech Strategy
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