Daily Forex Update: GBP/USD
By: Dima Chernovolov
GBP/USD continues to rise after the recent breakout of the high-quality Flag chart pattern which was previously identified by Autochartist on the daily charts. Autochartist rates the Quality of this Up Channel at the 9 bar level – which is the result of the sharp average Initial Trend (10 bars) and significant Uniformity and Clarity (both rated at the 7 bar level). High Initial Trend reflects the sharpness of the previous upward impulse which serves as the “flag-pole” of this Flag. GBP/USD is expected to rise to the Forecast Price 1.2556.
As can be seen from the daily GBP/USD chart below – the bottom of this Flag formed when the price reversed up from the powerful support level 1.2040 (which also earlier reversed the price sharply at the start of October). The proximity of this support level adds to the probability GBP/USD will continue to rise toward the Forecast Price 1.2556 tomorrow (the breakout of which can lead to further gains toward the next strong resistance level 1.2770, monthly high from December).
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