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GBP/USD-Bulls Defended Key Support

Yesterday, we saw the GBP/USD retreating after a failure to clear the 1.5675 high. We noted a critical support around 1.5530. Ij the 4H chart we can see some common support from the 1.5528-1.5550 area. 

GBP/USD 4H Chart 7/31
(click to enlarge)

During the 7/31 session, we saw the pair hold above 1.5550 and bounce up back to the 1.5675 resistance. Again we are seeing selling here. This is indeed a key resistance holding back a possibility sharp rally. Imagine traders continuing to sell at 1.5675. With enough of these traders putting a stop just above 1.5675, or even just above 1.57, a break above this area has the potential of tripping these stops and could be very bullish for GBP/USD in the near-term. 

GBP/USD Daily Chart 7/31

(click to enlarge)

From the daily chart we see a market that has recently turned bullish for the medium-term. Price is now above the cluster of 200-, 100-, and 50-day simple moving averages (SMAs), and the daily RSI has held above 40 after tagging above 70. Thus, the bullish outlook would put the 1.5930 high on the year in sight, with upside risk towards the 1.60 psychological handle.