GBP USD Trend Turns Up on Daily Chart

A strong surge to the upside in the GBP USD turned the main trend to up on the daily chart.

A strong surge to the upside in the GBP USD turned the main trend to up on the daily chart.

The main trend turned up overnight on the trade through the last swing top at 1.6047.  This move could be a combination of short-covering and fresh speculative buying ahead of this morning’s Bank of England monetary policy statement.

The chart indicates that the next upside target is another main top at 1.6125.  A new main bottom has been formed at 1.5858.  This bottom was preceded by bottoms at 1.5802 and 1.5768.  The series of three higher bottoms is a sign of strength.

The short-term range is 1.6467 to 1.5768.  This range creates a key retracement zone at 1.6117 and 1.6200.  Combined with the old main top, 1.6117 to 1.6125 could be a resistance level today.  A breakout over this resistance zone should trigger an upside break out to 1.6200.