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GBP/USD at the Crossroads; Trading in a Range

The GBP/USD has been rallying in February after putting in a bottom above the low on the year of 1.4950. The daily chart shows the rally up to 1.5480, where it met resistance. Note that this is near a previous support pivot in December. Also, note that the RSI is right around 60. When the RSI holds below 60, the prevailing bearish momentum is maintained. Above 60, the RSI would suggest a loss of the prevailing bearish momentum.

GBP/USD Daily Chart 2/24


(click to enlarge)

A above 1.5480 would open up the 1.56 area with risk of extending toward the 1.58 handle. Now, when we look at the 1H chart, we can see that the pair is starting the week with a failed attempt to break above 1.5480, at least so far. Price is retreating back towards the middle of the consolidation range. If price holds above 1.54, the pressure remains to the upside. Below this level, where the 200-hour SMA resides, cable would be pressured towards the 1.5315-1.5330 lows. 

GBP/USD 1H Chart 2/24


(click to enlarge)

A break below 1.53 should flatten February's uptrend, and introduce the bearish continuation scenario. When we look back at the daily chart, we see that a break below 1.52 would put cable back in the lower half of February's price action, and pressure the 1.4950 low on the year.

So, we have GBP/USD trading in a range at the crossroads. Which way will it break? I think if it breaks to the upside, we should limit the bullish outlook. Because of the prevailing downtrend, I would prefer to break to the downside, or try to look for resistance around 1.56 if price does extend higher.