GBP : Maintaining Bullish Sentiment
(Sat, 24 Oct 2020). GBP/USD experienced some nice strength next week, and on that it kept forging the bullish channel building over the past month. As long as it stays within its confines then the outlook will be neutral at worst, with more upside expected.
Within the top and bottom-side thresholds of the channel lies a parallel that has seen much play over the past month. It currently lies right around 13035, but moving higher of course. If price can stay above this line it will keep Cable in the middle to upper portion of the channel, which is considered its most bullish posturing.
If, however, we see the bottom of the channel brought into play, it doesn’t mean things are necessarily souring, but in fact could present a potentially good risk/reward opportunity for would-be longs to establish a position with a tight stop.
If we do see strength continue, and even accelerate, the mid-13300s up to 13500 will be a big area of resistance. In that vicinity lies a big horizontal level and a trend-line from 2007. Indeed a big macro spot to pay attention.
On the flip-side, should the lower parallel break, then a neutral to bearish outlook may be warranted. The first level of support to watch comes in around the 12860 area, with an even larger drop towards the September low under 12700 being the risk.
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