The GBP/USD is in a consolidation pattern that is between the high of 1.67351 to the low of 1.52613, both these points are major psychological levels and are very obvious, so we are expecting some strong action around these levels.
A break above 1.67351 will break the current consolidation pattern and continue the rise from the low of 1.34982 and make way to the 1.7400 zone. This will also be a strong indication the long term down trend from the high of 2.11688 is over.
In the medium term I am looking for a break above 1.61641. This will continue the rise from 1.52613 to retest the high of 1.67351. There is also a minor double bottom that has formed that is bullish in nature (blue arrows) and the MACD has crossed the signal line on the weekly chart and shows that momentum is building up. The GBP/USD is now trading above the 200SMA and looks to be acting as support.
To the downside I am looking for a clean strong break below the key psychological support level at 1.52613. This will extend the down movement from 1.67351 and test the low of 1.42466. I won’t be using that as my target since it’s too far, I will just use 1.47785 which is around a 500 pip profit.