Monday, December 19, 2016

Technical analysis of GBP/USD for December 19, 2016

Overview:

The GBP/USD pair continues to move upwards from the level of 1.2428. The pair rose from the level of 1.2428 (coincides with the ratio of 50% Fibonacci retracement) to a top around 1.2486. Right now, the first support level is seen at 1.2428 followed by 1.2346, while daily resistance 1 is seen at 1.2509. According to the previous events, the GBP/USD pair is still moving between the levels of 1.2428 and 1.2626; for that we expect a range of 198 pips (1.2626 - 1.2428) in coming days. On the one-hour chart, immediate resistance is seen at 1.2509, which coincides with the ratio of 61.8% Fibonacci retracement. Currently, the price is moving in a bullish channel. This is confirmed by the RSI indicator signaling that we are still in a bullish trending market. The price is still above the moving average (100). Therefore, if the trend is able to break out through the first resistance level of 1.2509, we should see the pair climbing towards the daily resistance at 1.2626 to test it. It would also be wise to consider where to place stop loss; SL should be set below the second support at 1.2346.