Following Monday’s closing price reversal top, a pattern that usually indicates the start of a 2 to 3 day sell-off, the GBP USD reversed course to the upside, setting up a near-term test of a major retracement zone.
Based on the main range of 1.6301 to 1.5268, a major retracement zone has formed at 1.5784 to 1.5906. A steep uptrending Gann angle from the 1.5268 bottom comes in at 1.5788 on June 20. Combined with the 50% level an upside target and resistance cluster has formed at 1.5784 to 1.5788.
Daily GBP USD Pattern, Price & Time Analysis
If the British Pound continues along the path of this uptrending Gann angle then another resistance cluster could be tested on June 25. On this date, a downtrending Gann angle from the 1.6301 top drops in at 1.5901, the uptrending Gann angle from the 1.5268 bottom moves to 1.5908 and the Fibonacci level or 61.8% retracement price is at 1.5906. Based on this set-up, the near-term upside target is 1.5901 to 1.5908 on June 25.
Over the next week, British Pound traders should monitor the market’s move along the uptrending Gann angle. This angle should serve as a guideline if the market continues to move higher. A failure to follow this angle higher will be an indication that sentiment may be shifting to the downside. If this is the case then the market is likely to retrace 50% of the last rally from 1.5268.
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