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GBPUSD: Bullish divergence highway to 1.6251

The pound is benefiting from the current softer tone around the US dollar after worse than expected US labor market results and retail sales allowing the current recovery.

Today on the economic agenda from the U.S we have the preliminary Reuters/Michigan Consumer Sentiment Index in October that is expected to fall from 84.6 to 84.1.

GBPUSD initially fell but found enough support at 1.5986 Year low support zone, recovering from mid-day and closing near the high, above the downward trend line and above the 10 day moving average showing signs of strength to the upside. Stochastic is setting higher lows and price is making lower lows (bullish divergence), signs that the downside may begin to get exhausted.

Expecting upward move to 1.6251 on a break above previous day high at 1.6096 (scenario 1).