GBP/USD bulls eye a retest of 1.2800
Updated
GBP/USD remains in a strong uptrend on the daily chart, although prices began retracing on June 16th. We're now looking for momentum to revert to its bullish trend.
Whilst prices failed to hold above May high, they're now back above them having formed a 3-day bullish reversal pattern (Morning Star). A small bearish inside day formed due to the 3-day weekend in the US, and prices remain beneath a retracement line. But bulls could seek evidence of a swing low around support zones such as 1.2664/67 (weekly pivot point/May high) or the 1.2575 (volume node and lower 1-week implied volatility band).
We're targeting the 1.800/50 area near cycle highs and the upper implied volatility band.
Whilst prices failed to hold above May high, they're now back above them having formed a 3-day bullish reversal pattern (Morning Star). A small bearish inside day formed due to the 3-day weekend in the US, and prices remain beneath a retracement line. But bulls could seek evidence of a swing low around support zones such as 1.2664/67 (weekly pivot point/May high) or the 1.2575 (volume node and lower 1-week implied volatility band).
We're targeting the 1.800/50 area near cycle highs and the upper implied volatility band.
Trade closed: target reached
A slow start, but a decisive finish with a break to a 3-week high and reaching out 1.08000/50 target. However, the 'breakout' itself is less convincing as it effectively closed on the June high with a potential hanging man candle - which leaves toom for a bit of a shakeout around current levels.
Shakeouts aside, an eventual move to 1.3000 remains plausible unless we see a surprise miss with UK wages and employment coupled with stronger-than-liked US inflation.
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