GBP/USD May Test The Local High At 1.36554

On the monthly time frame the potential target of the medium term rally of the GBP/USD pair is the zone around 1.3950 – 1.4000 and for the moment the pair is attempting to resume its move to the upside to that target.

 

The bars on the W1 time frame are also a signal for the continuation of the rally within the trend channel (in red) with the first strong resistance on the same time frame is on the zone around 1.3520 – 1.3550. In case the pair breaks out above that resistance we could expect the rally to continue to the resistance trend line (in red) of the channe.

Despite that we should keep in mind the already formed bearish bar on the monthly time frame (October 2017) which is at the high of the rally from 1.19858 (16^th January 2017) to 1.36554 (20^th September 2017) and usually is a signal for an impending drop. This bar is on a very large time frame, however, so it is uncertain how trustworthy of a signal it is. So the abovementioned zone around 1.3520 – 1.3550 should be watched very carefully, since it is not out of the question for the pair to begin falling for a test of the historical low at 1.19858 after it.