GBP/USD – Bullish Breakout Exposes the 2014-High

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GBP/USD - Bullish Breakout Exposes the 2014-High

The GBP/USD rallied during the 6/12 session, pushing to 1.6860 before finding intra-session resistance. This rally has broken above a falling wedge resistance shown in the 4H chart below.
gbpusd 4h chart 6/12

The bullish breakout opens up the 1.6920 resistance pivot, as well as exposes the 2014-high at 1.6996. The 1.6780-1.6785 area could be important in the short-term. Upon a subsequent pullback, if traders hold cable above 1.6780, the bullish outlook can add confirmation. A break below 1.6780 however puts the focus back toward the 1.6740 support pivot, and the 1.6692 low. The current bullish continuation signal would be invalid, and the bearish consolidation/correction mode since the beginning of May would return into play.

GBP/JPY had a bullish breakout at the start of June. It was in a falling channel pattern since early May, so in a sense the consolidation/correction dynamic was the same, expect the bullish breakout occurred earlier. For the British pound-Japanese yen pair, it is at the confirmation phase after a pullback from 172.50 to 171.00.
gbpjpy 6/12 4h chart
The ability to hold above 171 is showing that the breakout may have shifted the mode back to bullish. Now that price is establishing support at 171, a break below this can put the focus back to a bearish consolidation/correction market. A break back above 172 can put the common high in the 173.40-50 area, as well as the 2014-high of 174.83 in sight.

To contact the reporter of this story, email Fan Yang at fan@forexminute.com
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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.