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Bulls Firmly Confirm 1.2514 on GBP/USD

June 16, 2020 at 5:36 by Dorin Rosu

The Great Britain pound versus the US dollar currency pair managed to confirm the 1.2514 level as support. But until where are they able to drive the price?

Long-term perspective

The appreciation that started from the 1.1409 low and, thus, confirmed the solid support of 1.1476, also managed to conquer the next level of major importance, 1.2092. However, the following handle, 1.2514, was massively protected by the bears, the result of the bullish attempts -limited by the bears — being visible as the 1.2647 and 1.2643 highs, which also play the role of false breakouts.

As it seemed that the bulls were not yet prepared for their next endeavor, the price came back towards 1.2092. Although this could have been considered a bearish triumph — as the piercing of the 1.2305 and 1.2198 intermediary support levels got invalidated — the bulls firmly confirmed the 1.2092 level as support, springing a rally that strong, that not only pierced the 1.2514 level but also took out the highs that pertain to the false described piercings and extended until the next intermediary level, 1.2777.

Given the context, the first scenario is the bullish one, which stands for the continuation of the current appreciation phase. If 1.2777 gets pierced and validated as support, then the bulls can drive the price towards the next resistance, the intermediary level of 1.3002, and from there to the 1.3261 key level.

On the flip side, if 1.2777 cannot be passed, then a reversal pattern may be underway, one like a double top with 1.2514 as the neck-line. If this is the path that the market participants would follow, then 1.2305 and 1.2198 stand as targets.

Short-term perspective

After printing the low at 1.2075, the price went out of the descending trend and stopped at the 1.2813 high. From there, it dropped, etching the low of 1.2454 and, thus, confirming the trendline as support.

As the price got above an important level, 1.2612, a throwback that confirms it as support is to be expected — or at least a consolidation above it. Of course, a confirmation of 1.2525 as support before that is possible. As the bulls continue their march towards the north, 1.2783 is the first target, followed by 1.2876.

Only if the trendline fails to continue serving as support, then the bears can extend a decline until the 1.2282 level, their prime target.

Levels to keep an eye on:

D1: 1.2777 1.3002 1.3261 1.2514 1.2305 1.2198
H4: 1.2612 1.2525 1.2783 1.2876 1.2282

If you have any questions, comments, or opinions regarding the US Dollar, feel free to post them using the commentary form below.

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