GBP/USD – Time for a bounce!

The Pound broke the support specified in yesterday’s report 1.6092 but it settled for 1.6028, twice, before starting to bounce up this morning. If we take a look at the attached chart we can understand why the Pound started to rise, since it reached the bottom of the channel illustrated on the chart. Thus, the odds of a bounce are greater today, in spite of the moderate penetration of 1.6045. Short-term support that protects this scenario is 1.6048, staying above it is crucial for optimism, but breaking it would bring yesterday’s targets 1.5981 & 1.5900 back into focus. . On the other hand, short-term resistance is at 1.6110 and breaking it would mean that we will witness an upward correction that can make it to the important 1.6190 and may be later 1.6316.

Support:
• 1.6048: the rising trend line from yesterday’s low on intraday charts.
• 1.5981: Jul 8th low.
• 1.5900: Oct 5th low.

Resistance:
• 1.6110: short-term Fibonacci 61.8%.
• 1.6190: the previous resistance, that presented itself in the past two weeks, and turned to an important resistance now.
• 1.6316: Dec 15th high.