The British Pound is trading at 1.1611 after reaching a high of 1.1644. A strong bullish bias can be seen on the 4-hour chart and it is likely to continue its rise and could reach 8/8 Murray located at 1.1718.
Investors are speculating about a less aggressive agenda for the Fed’s monetary policy in response to US macroeconomic data, which point to a slowdown in recent weeks. This is reflected in the continuing decline in US Treasury yields, weakening the US dollar and pushing it down to its lowest level since September 20th.
According to technical analysis, the convincing break of the level 1.15 seen in the last few hours and subsequent strengthening of the GBP/USD pair encourages the bulls.
Therefore, any significant pullback could be seen as a buying opportunity and GBP/USD is more likely to consolidate above the psychological level of 1.15 in the coming days.
The latest candles on the 4-hour chart show that the British pound is exhausted, currently trading under low market volatility. It is likely that a technical correction could occur in the next few hours towards the psychological level of 1.15 or towards the 21 SMA at 1.1426.
In the chart above, we can see that the British pound is trading within an uptrend channel formed since September 28. A rally towards the resistance at 1.1718 or the top of the uptrend channel around 1.1795 is in the cards.
In case the British pound fails to break above its high of 1.1644, we should expect a technical correction and it will be a clear opportunity to sell below 1.1611 with targets at 1.1500 and 1.1426 (21 SMA).
As long as the British pound trades above the psychological level of 1.15, any technical correction will be seen as an opportunity to resume buying and the price could reach 1.1718 (8/8 Murray) and 1.1790.
The eagle indicator is reaching overbought levels and is turning down. Thus, we should avoid buying at the current price levels. In the meantime, we should expect a correction in the next few hours and GBP/USD could reach the 200 EMA located at 1.1326.
The material has been provided by InstaForex Company – www.instaforex.com