September 18, 2013 – GBP/USD (daily chart) has confirmed a continuation of its sharp bullish trajectory today by establishing a new 8-month high just short of major resistance at the 1.6000 psychological level. This steep bullish trend has been in place since the early-July double-bottom low around 1.4800, which accelerated sharply after the late August pullback and rebound off the 1.5400 support area. Since that rebound, the pair has risen in a near-vertical fashion, breaking out above key prior resistance levels at 1.5600, 1.5750 and 1.5825, to make its current approach of the major 1.6000 handle.
While another pullback should soon be due, the bullish trend remains strong, especially on any significant breakout above 1.6000. In the event of this breakout, the primary upside resistance targets reside around the 1.6150 intermediate level and then the key 1.6300 resistance area. Strong downside support on any pullback now resides around the 1.5750-1.5825 zone.
James Chen, CMT
Chief Technical Strategist
City Index Group
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