Daily Market Analysis and Forex News
GBPUSD bulls show their strength
The GBPUSD currency pair on the Weekly (W1) time frame was in a remarkably long downtrend until a lower bottom formed on 25 September at 1.03514.
After the last bottom, the bulls stirred after their long rest and started flexing their muscles. The price broke through the 15 and 34 Simple Moving Averages with the Momentum Oscillator following close behind as the price broke through the 100 baselines into bullish territory.
A critical resistance level formed on 11 December at 1.24463 but the bears were not giving up that easily.
They tried their best to take back control of the market but the hammer candle pattern that formed at a support level on 1 January at 1.18415 was a definite warning signal that the bulls might muster their strength again, and so they did.
If the price breaks through the resistance level at 1.24463, then three possible price targets can be calculated from there. Attaching the Fibonacci tool to the higher top 1.24463 and dragging it to the bottom of the support level near the 34 Simple Moving Average at 1.18415, the following targets can be determined. The first target may be estimated at 1.28201 (161.8%). The second price target is possible at 1.34249 (261.8%) and the third and final target can be anticipated at 1.44034 (423.6%).
If the support level at 1.18415 is broken, the above scenario is no longer achievable and should be reviewed.
As long as the bulls continue to push the price higher with demand overcoming supply, the outlook for GBPUSD on the weekly time frame will remain bullish.