GBP On Watch Price action in GBPUSD is catching my eye here. The pair has been grinding lower in a well-defined bear channel since the YTD highs. However, the last decline saw strong bullish divergence in momentum studies and price has since traded back up to test the channel top and the resistance level at 1.2626. Currently the market looks to be carving out an inverse head and shoulders pattern suggesting room for a fuller reversal higher on a break of the 1.2626 level targeting a run up to 1.2988 initially.Keep An Eye OnThe recent pull-back in the US Dollar has helped GBP. With market chatter starting to build around a potential Fed pause post-July, all eyes will be on today’s US data. If USD is seen weaker in response to today’s releases this could well provide the fuel for a breakout higher in GBPUSD. Alternatively, a USD rally from today’s data would likely negate this set up.
Source: Tickmill
