© Dukascopy Bank SA
GBP/USD is slowly appreciating and has formed a Channel Up pattern on the 4H chart. The pattern has 62% quality and 97% magnitude in the 69-bar period.
The pattern started when the pair bounced from 1.5394 and after testing pattern's resistance band at 1.5738 and 1.5768 the pair slowed down at 1.5671 where the pair is currently trading. Long traders, who expect that the pair will bounce from SMA200 and will continue to follow pattern's trend, could set the first target at the recent peak at 1.5731. If this level is breached, next targets could be at the recent pattern's resistance test level at 1.5768 and, if the pair gains momentum, at the patterns resistance band at 1.5787.
Technical indicators on aggregate on 4H and 1W time horizon and the stochastic indicator on 1D outlook send sell signals. The SWFX market sentiment shows that 56% of traders expect depreciation of the pair. Short traders should focus on the 31st of July low at 1.5626. If this level is breached next targets could be at SMA200 1.5606 and, if the pair gains momentum as it did on 26th of July, at the pattern's support band at 1.5500.
© Dukascopy Bank SA