After forming a double bottom above 1.67, GBP/USD rallied this week to key resistance in the form of a falling trendline.
In the 4H chart, you can see that reaction to today’s US Non-Farm Payroll data was USD-positive. However, if traders can keep cable above a previous resistance area around 1.6775, then the current bullish attempt is still in play.
A break above 1.6850 at this point will clear the falling trendline and give a bullish signal. Returning below 1.6750 could be a sign that the market remains bearish, though it may still be in the context of a bearish correction against a prevailing strong uptrend.
The daily chart shows GBP/USD at a critical juncture. The price action in the 4H chart translates to a possible pennant pattern seen in the daily chart. A break above 1.6850 would therefore be a strong bullish continuation signal, at least with the 2014-high near 1.70 in sight.
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