Consolidation Phase Above 1.3261 on GBP/USD?

The Great Britain pound versus the US dollar currency pair seems to have already started a consolidation. But is this really a consolidation, or are the bears preparing a new fall?

Long-term perspective
After the formation of the 1.2075 low, which validated the solid area of 1.2092 as support, the price started an ascending trend.
The movement extended until very close to the 1.3502 intermediate level. From there, it printed a sharp retracement that, upon reaching 1.3261, transformed into a fall that noted the 1.2675 low.
After this, the bulls resumed their efforts, which paid of, as the price was sent once more above 1.3261. Even more, after defining the 1.3398 high, the correction that followed was not under the same bearish pressure as the one from the previous high, almost starting to look very similar to a consolidation phase.
Since, most of the time, these short-lived range trading phases prove to be continuation patterns, and since the current one is preceded by a rise, the expectations are for the appreciation to resume.
So, as long as the price oscillates above the firm level of 1.3261, the bulls have the window of opportunity open, thus being able to send the price towards the 1.3502 intermediate area and, even more, validate it as support.
However, if any appreciation attempt is stopped in its tracks by a determined bearish presence, then 1.3261 could give way. Still, even without such a bearish development, the simple fall of the price beneath 1.3261 makes it possible for the drop to reach the next support area, defined by the 1.3200 level, the descending line, and the lower line of the ascending channel.

Short-term perspective
The rise from the 1.2853 low, after the false piercing of the 1.2876 intermediary level, prolonged until the 1.3398 high, the movement taking the shape of an ascending trend.
The current consolidation phase sits just above the 1.3268 level. As long as the flat — limited by 1.3268 as support and 1.3392 as resistance — continues, so can the appreciation, thus targeting 1.3515.
However, if 1.3268 gives way, then the bulls may be aided by the next support, 1.3175. Still, such an unfolding makes it possible for the bears to take over and, as a consequence, send the price to 1.2983.

Levels to keep an eye on:

D1: 1.3261 1.3502 1.3200
H4: 1.3268 1.3392 1.3515 1.3175 1.2983

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Original from: www.earnforex.com