Various currency pairs opened with gaps due to the Italian referendum and GBP/USD was no different. The gap in this case was 65 pips, but the pair recovered it shortly after the market opened and in the beginning of the London session GBP/USD even formed a new high slightly above the level at which it closed last Friday – 1.27369.
On the daily time frame the move to the upside from 1.20819 to 1.27436 is forming a pennant (in red) but there has been no breakout yet.
In case there is a breakout to the upside the limit of this pattern is 595 pips from the breakout level, which means a possible move to the upside towards 1.33350. So far I am not considering a possible breakout to the downside, but I will if it occurs.
On the smaller, 30M time frame there is another pennant without a breakout either. The limit of this smaller pennant is 117 pips from the breakout level.
In case of a breakout to the downside the target will be around 1.2590.
Thanks for such an informative analysis.
ReplyDeleteVery helpful analysis, thank you.
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