GBP/USD Stopped At A Strong Resistance Level Before The Snap Election

The zone around 1.2900 – 1.2990 logically turned out to be a pretty strong resistance for GBP/USD after it was a quite strong support zone too, in the period July-September 2016, which the pair broke out below only after testing it twice. Usually such zones have an effect on the way the price develops over time, and this is the case now too.

My expectation that the pair will continue rising to test the resistance trend line of the downward trend from 6th July 2014 to 2nd October 2016 remains valid.

The last bullish bar from last week is a pin bar, which formed above the bar before it, which in itself is a signal for strong bulls. Despite that, considering the strong resistance level, we could see a correction to the downside to 1.2880 – 1.2750, before the pair continues rising.

We should not forget that that in a month there will be snap general elections in the UK, which may help the Prime Minister Theresa May find more support from the parliament in the impending talks with the EU regarding Brexit. So I think that is possible for the pair to remain range-bound around the above-mentioned level in expectation of the election results.