Daily Market Analysis and Forex News
GBPUSD: Bullish momentum on the increase
The GBPUSD on the D1 time frame was in a down trend until 26 September when a possible last lower bottom was recorded at 1.03516. Prices that low was just too good to be true for the bulls and they started buying into the price weakness.
After the lower bottom at 1.03516, the price hurled through the 15 and 34 Simple Moving Averages and the Momentum Oscillator oscillated into the bullish terrain. This could have warned traders that know the market language that the bearish momentum was fading.
A possible critical resistance level formed on 5 October at 1.14945. The bears then thought they could take control of the market again but this was not to happen as a higher bottom formed on 12 October at 1.09218 as the bulls resumed their momentum buildup.
If the price of GBPUSD manages to break through the critical resistance level at 1.14945, then three possible price targets can be calculated from there. Applying the Fibonacci tool to the lower top at 1.14945 and dragging it to the higher bottom at the support area near 1.09218, the following targets may be considered. The first target might be likely at 1.18484 (161%), with the second price target conceivable at 1.24211 (261.8%). The third and final target may be possible at 1.33478 (423.6%).
If the price at 1.09218 is broken, the bullish scenario becomes highly unlikely and care must be taken to stay objective until another opportunity arise.
As long as bullish momentum continues to increase, the outlook for the GBPUSD on the D1 time frame will remain to the upside.
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