British Pound Struggling At New Resistance

For many weeks running, has been trading sideways in the pink consolidation. After moving higher recently, just what are the chances of the breakout sticking?

GBP/USD D1 Chart

recently broke above the pink multi-week consolidation, and the bulls didn’t really look back. The pair extended gains and reached the orange resistance area created by the May peaks, and the 50% Fibonacci retracement.

This move took the exchange rate also slightly above the upper border of the rising green trend channel. Before jumping to conclusions, let’s take a look also at the position of the daily indicators. Both the CCI and the Stochastic Oscillator are very close to generating their sell signals.

Coupled with the above-mentioned resistance zone and the current position of the daily indicators, it seems that a reversal and lower values of GBP/USD may be just around the corner.

Should we see an invalidation of the breakout, we’ll consider opening short positions.

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