After a strong uptrend yesterday, the “Swissy” is coming in close contact with the resistance level at 1.0940. The pair has already tested this level one too many times in the past months. Will it be able to pierce through this time around? But take heed… The pair already made a false break a while back as it broke above the resistance but reversed upon hitting the psychologically significant 1.1000 mark, so don’t be fooled! Note that the stochastic oscillator is currently in the overbought area, which implies that buying pressure is pretty much thawed out. Sellers could soon take the upper hand and drive the price down to as low as 1.0640, where a strong support level is located.
Above is just an update of the previous GBP/USD chart that I made. The pair indeed bounced up from the range’s support at around 1.6350. Driven by strong fundamentals in the UK, the pair jumped by more than 150 pips after hitting the support. It was, however, unable to break above the 1.6500 barrier. Currently, the pair is still trading near the 1.6500 mark. It can push its way up to 1.6550 if it manages to close above this area. On the other hand, the pair can find itself back at 1.6450, 1.6400, or even at 1.6350 if investors do not stop selling at 1.6500.
After the steep decline from Tuesday, the pair found support at 1.4000, a round, juicy, psychologically significant number. Since then, it has been creeping up to 1.4120, the support level that was just recently broken by the pair. Now, it looks like the pair is slowly retracing some of its step back to the 38.2% Fibonacci level to retest broken support. If the pair does head upside, potential resistance could be found at 1.4120, 1.4155 and 1.4200 respectively. Conversely, if the pair takes a trip south, 1.4000 will prove to be a significant roadblock for sellers.