GBP/USD technical analysis forecast
James Chen January 30, 2014 2:54 PM
<p>What can we expect from GBP/USD in 2014? Looking back: GBP/USD price movements during 2013 GBP/USD (a daily chart of which is shown) […]</p>
What can we expect from GBP/USD in 2014?
Looking back: GBP/USD price movements during 2013
GBP/USD (a daily chart of which is shown) displayed a conspicuous ‘W-shaped’ pattern for the span of 2013. This pattern began high around major 1.6300 resistance, dropped swiftly to a low just above 1.4800 support in March, rose to an intermediate peak around the key 1.5750 level in June, dropped back down to the 1.4800 support area in July, and then finally rose sharply for the remainder of the year to end up around the 1.6300 area where it began.
September through November displayed a marked trading range that resided roughly between 1.6260 resistance to the upside and 1.5900-area support to the downside, before the pair broke out above the top of the range in late November.
The cross price then proceeded to break out above the noted major resistance around 1.6300 – a historically strong and significant resistance level. That breakout of the trading range tentatively confirmed a continuation of the strong bullish trend since July.
There was a slightly bullish consolidation for the month of December, before the pair went on to hit a 2+ year high at 1.6602 in the very beginning of 2014. A minor pullback then ensued before the pair continued to advance towards its long-term high once again.
The GBP/USD forecast for 2014: cable to hit new heights?
The technical outlook for GBP/USD continues to carry a substantial bullish bias moving further into 2014 and should continue to reach for higher highs. The near-term upside resistance target resides around the 1.6750 level, which would further extend the bullish trend, and then the 1.7000 resistance level.
Key downside support tentatively resides around the well-tested 1.6300 price region.
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