Following several weeks of sideways consolidation the GBP/USD has now finally broken out this area of price congestion on the daily chart, and now looks set to move firmly higher in the next few weeks. To the downside, the support level was clearly defined at the 1.5400 region whilst to the up side, 1.5700 region had been tested on several occasions. The breakout finally occurred last week with the GBP/USD now moving towards the 1.5850 region and beyond, and with this strong platform of support now below, cable looks set to test the 1.6000 region, and if this breached then we should see a test of the 1.6250 region in due course.
The bullish tone for the GBP/USD was signaled by Hawkeye as early as the 14th August with a volume Roadkill signal signalling an aggressive entry, with the two day trend, still remaining in consolidation, confirmed with the white trend dots. Should this follow through, then this will add further momentum to the bullish picture, and with the USD looking set to weaken on the dollar index, as a further round of quantitative easing is announced, expect to see further strength for sterling in the next few months.
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