The GBP USD closed higher after selling pressure failed to drive the market into a 50 percent retracement level at 1.5580. The strong finish gave the market a bullish bias while putting it in a position to challenge a retracement level at 1.5925 and a minor top at 1.5928.
Based on the main range of 1.6618 to 1.5233, the retracement zone at 1.5925 to 1.6089 is this week’s first upside target. Since the main trend is down, traders should watch for possible selling pressure to develop inside of this zone.
Uptrending Gann angle support is at 1.5793 this week. This angle could control the short-term direction of the market. On the upside, a downtrending Gann angle at 1.6058 could become resistance if tested. This angle also pierces the retracement zone and actually forms a resistance cluster with 1.6089.
A breakout may occur over the resistance cluster, but traders should know that the main trend will not turn up on the weekly chart until the swing top at 1.6165 is penetrated. Besides the close near the high of the week, the British Pound also closed over a downtrending Gann angle at 1.5825. This is another sign that a bullish bias is developing. This assessment will change if the uptrending Gann angle at 1.5793 fails to hold as support.
