Check out this nifty confluence on the 4-hour timeframe of GBP/USD!
Do you think the upward trend will resume soon?
Below are the technical signals that I keep.
GBP/USD in 4-hour forex Planned by TV
Cable has been cruising with higher lows connected to a steady rising trend line since last month.
The pair is back in correction mode and looks ready to test this support area, which is aligned with the 61.8% Fibonacci retracement level.
Above that, the area of interest coincides with a previous resistance area around 1.2850 a minor psychological sign as well as the 100 SMA dynamic support too!
This fast moving simple moving average (SMA) is above the 200 SMA to confirm that the uptrend is more likely to resume than to reverse. At the same time, the stochastic is rising from the oversold area to indicate the return of bullish pressure.
I am also noticing a bullish divergence, as the oscillator has formed lower lows while the price has been making higher lows. Stochastic has plenty of room to rise before reaching the overbought zone, so the GBP/USD may be able to climb to the swing high of 1.3143 and beyond.
Inflation data out of the UK was weaker than expected, though, so there could be a chance that the BoE might consider stopping the aggressive cycle of tightening. Then again, things are not looking good for the US economy either, as the June Retail Sales report came in below expectations as well.
UK Retail Sales is still up for release later this week, so GBP/USD could experience more volatility after that!