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GBP/USD: Could A Double Top Stop This Upward Move?

ByAvaTrade
AuthorAvaTrade
Published 06/12/2013, 08:04 AM
Updated 02/02/2022, 05:40 AM
GBP/USD
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GUID
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NOTE
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ACT
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Bull Case

The GBP/USD pair completed its ascending triangle pattern (shown by orange lines) on a 30 minute. This was mentioned in yesterday's daily analysis. The price is trading well above the 50-and 100-day moving averages, which means that the bulls are still very much in control. The price action is also trading above the upward trendline, and it has not violated this trendline which represents the fact that the upward trend is still intact and it is strong.

The RSI is still trading in line with the price action. As the price is making a higher high, so does the RSI so the bias could be to the upside. However, it is important to note that the RSI is about to enter into an overbought zone, which is a sign that the GBP/USD pair may pause or reverse.

Bear Case
The GBP/USD is trading in a resistance zone on a 30 minute time frame. However, this is the second time the price is visiting this level. However, this level is still considered as a valid resistance level as the price left this level very sharply last time, and left very little time at this level. This means there could still be enough selling pressure to push the price back down again.

It seems like that the price is also forming a double top - which is usually a reversal pattern (shown by the yellow boxes).
<span class=GBP/USD M30" width="1443" height="741">
Important Levels

Resistance Zone
1.5845-1.5808 Major
1.5690-1.5639 Minor

Support Zone
1.5460-1.5429 Minor
1.5148-1.5108 Major
1.5034-1.5005 Major

DISCLOSURE & DISCLAIMER:
The above is for informational purposes only and NOT to be construed as specific trading advice. responsibility for trade decisions is solely with the reader.

by Naeem Aslam

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