GBPUSD is up this morning, as the price looks to be leaving behind a few days of consolidation trading. In the last hour, the British Pound managed to trade above the August 5 high of 1.2176 and that appears to have triggered stop-loss orders.
The next resistance level that traders might be targeting is the July 31 high at 1.2250 followed by the 50% correction level of the latest bearish leg at 1.23.
The latest gains in the GBPUSD are probably due to profit-taking as the price has failed to trade much lower since July 3. We can also see similar gains in other oversold USD pairs such as AUDUSD, and NZDUSD. Risk-appetite is also overall up as the S&P 500 and other European stock market indices have found some support, that appears to have stopped the total meltdown of markets in the last few days.
In the longer-run, the GBPUSD trend remains downwards as is it appears that the UK is heading for a hard-Brexit, and as I have been sharing in my morning briefs I think traders will short-sell GBPUSD in the 1.23 to 1.24 range. Buyers would need to lift the price above the July 24 high of 1.2523 to end the longer-term downtrend. As for today, the short-term trend will remain bullish above the August 5 low of 1.2099.Don’t miss a beat! Follow us on Twitter.