Forex Update: GBPUSD at a crossroads with support building
Hi traders, today we’re looking at GBPUSD as price has lifted from a demand area and could be trying to set up a new continuation.
Looking at today’s price action we can see a new move higher from 1.3530 support. This level is a midpoint in the demand area box. We can see several tails showing buyer interest once price moved back below 1.3530. These tails reinforce the support and the demand area for now. This pattern lines up in a new leg higher leg that began in late January when the last HL was set. The price action reviewed is a pretence to an idea that this could be a continuation pattern building, which could lead to a new leg higher from buyers.
If the leg does begin we will look at the LH as the first resistance and if buyers can break that level, we will be looking higher to 1.3700 as the next possible point of resistance, if reached. The USD plays a role here and this week’s US CPI data could help confirm the pattern idea or set it up to fail. A USD rally could put heavy pressure on the GBPUSD and cause a possible breach/break of the demand area leading to it to fail.
US CPI data is due to be announced on Thursday at 8:30AM EST
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