GBP/USD consolidates gains near long-term highs
James Chen July 9, 2014 6:18 PM
<p>GBP/USD (daily chart) is trading within a tight consolidation range just off its new multi-year high of 1.7178 that was reached late last week. This […]</p>
GBP/USD (daily chart) is trading within a tight consolidation range just off its new multi-year high of 1.7178 that was reached late last week. This high marks a level not seen since October of 2008, and has extended the steep and relatively uninterrupted uptrend that has been in place since the July 2013 low near 1.4800. The 50-day and 200-day moving averages continue to rise sharply and to be in clear separation, contributing to the bullish trend assessment.
Having broken out above the key 1.7000 level in June and now establishing this major psychological level as new support, the currency pair has formed a tentative flag pattern near its multi-year highs. In the event that this flag fulfills its typical role as a continuation pattern, a breakout to the upside should seek an immediate upside target around the 1.7250 resistance level.
To the downside, any further pullback from the long-term highs should find major support around the mentioned 1.7000 level, which is also around the 38% Fibonacci retracement level of the last major bullish run from the 1.6700 support lows up to the noted 1.7178 high.
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