One of the most interesting pairs to trade during the pandemic was GBP/USD. Since last November, the market is in a strong rally, with the series of higher highs and higher lows still holding. Currently, the market struggles at dynamic resistance given by the upper edge of a bullish flag, but is resilient to any downside. A break higher opens the gates to the gigantic measured move that projects the pair much higher.
The British pound traded with a bullish tone since last November and continues to benefit from positive news. Brexit went as smoothly as possible so far. Moreover, the vaccination pace in the United Kingdom is one of the fastest in the world, pointing to a quick economic recovery once the economy reopens completely. Also, the economic data coming out of the United Kingdom keeps improving.
GBP/USD Technical Analysis
The pair corrected in March but now looks ready to resume its rally. Technical traders should focus on two things.
One is a breakout and close above the upper edge of the flag. Such a development is bullish and suggests a long trade with a stop at the lows and a target above the recent highs.
Another is a move above the previous lower high. Such a move will put further bullish pressure on the market, and a squeeze may follow.