Continued Bullish movement yesterday as price broke and closed above daily moving averages. The moving averages haven’t yet crossed to the upside so we haven’t confirmed further bullish moves but these may now provide a level of support as we look to retest the downtrend in line with the refined Fibonacci retracement region. This could form the lower high in the trend to then follow price back down towards 1.3000 and even slightly beyond to test the long-term uptrend before next week’s GBP interest rate decision.
Here on the H4 timeframe price has formed new highs after an extended bullish leg. We have now seen a full Fibonacci retracement to the 78.6% level. Provided this level holds as resistance and price doesn’t close beyond here we can expect a reversal from here. I do anticipate some form of consolidation though to retest the downtrend once more in line with the 200ema. Overall I expect this confluence to hold price down but we’ll need to see this test and rejection to confirm this. Should we reverse we can set our targets at 1.3150 and then 1.3110. Otherwise, if this countertrend holds as support we’ll be seeing 1.3250 weekly resistance.