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GBP/USD Developing a Rounded Bottom at Key Support

Earlier this week, we saw some reaction in the GBP/USD as it fell near 1.51. The reaction was "enough" to trigger consideration of a price bottom attempt. GBP/USD - Enough Reaction to Anticipate Support

GBP/USD 4H Chart 10/6


(click to enlarge)

As we take a look at the 4H chart, we can see that price indeed held above 1.51 and has been forming what appears to be a rounded bottom. A break above 1.5250 should complete this bottom. The next level to monitor for resistance will be around 1.5330, a previous support pivot. Then, the 1.5475-1.5480 area is a key support/resistance pivot, but we can even extend it to 1.55.

For now, I would limit the bullish outlook to these two targets. After all, even in the 4H chart, we can see that the trend is NOT bullish, so we should be aware of the prevailing bearish mode.

GBP/USD Daily Chart 10/6

(click to enlarge)

When we look at the daily chart, we can see that the market is not bullish, but it is not bearish neither at least in 2015. Since May, price has been actually sideways. The fact that price is at multi-month consolidation support also gives confidence for bulls to enter at the 1.5090-1.5175 area. Still, we can see reasons we would want to limit the bullish outlook at most to 1.55 because there has been lower highs since June, and because 1.55 represents a key support/resistance pivot area.