GBP/USD Breaks Above Recent Range

by Admin

Awards 2013

GBP/USD 4H chart 4/5/2013 9:31AM EDT

GBPUSD

BoE reaction: The GBP/USD was consolidating in sideways, ranging action since finding resistance at 1.5260. Ahead of the Bank of England meeting, it was sliding down, back toward the 1.5026 support pivot. However, even before getting there, the Bank of England announced no changes to its policy. The reaction was bullish and pushed the pair toward the 1.5260 resistance area.

NFP reaction: After stalling within the consolidation resistance, the NFP showed only 88K jobs added to the US economy in March after a 268K reading in February. This also missed expectations of about 200K. The result – mass USD sell-off (except against the CAD) and AUD. This USD-weakness pushed the GBP/USD above 1.5260 until to the 1.5320 resistance pivot, where it stalls again.

Target, momentum: If this trend is to continue, the RSI should first tag 70 and above, and then on a subsequent throwback should stay above 40. The next possible target/resistance would be the 1.5422, 38.2% retracement level. Another slightly more aggressive target, using a conventional range breakout projection is at about 1.5495 (1.5260+ (1.5260-1.5025)).