Next Target on GBP/USD: 1.3504?

The Great Britain pound versus the US dollar currency pair managed to overcome an important resistance area. But is this movement sustainable?

Long-term perspective
After etching the 1.2075 low, thus validating the 1.2092 area as support, the price began an ascending trend that, after piercing two intermediary levels, 1.2777 and 1.3000, respectively, put the bulls in such a good mood that they extended the impulsive swing until the triple resistance coined by 1.3261 and the two trendlines.
Even if the trendlines seemed that they may contain the price, eventually, they were transcended, and the 1.3261 resistance level was the only possible limiter for an ascending journey.
On August 27, the rejection from 1.3261 led to the impression that the bears are in control. Nevertheless, the next day, August 28, the bulls were able to penetrate this defense and close the day at 1.3351, a relatively distant value from the level. Even more, the next day noted a higher high, and September 1 also did the same, as of writing.
In this context, one scenario is the one in which the appreciation simply continues. Still, a short-lived consolidation — like a pennant or a flag — or an incomplete throwback, thus one that does not print a low very close to 1.3261, are as well possible scenarios. All of them point to the 1.3502 intermediary level.
Only if the price falls under 1.3261, then it finds itself in a neutral zone and targeting the 1.3000 psychology level.

Short-term perspective
From the 1.3053 low, the price began an ascending movement. After it conquered two important resistances, 1.3157 and 1.3269, the bulls head on for the 1.3349 intermediary level, which had been conquered as well.
Currently, the psychological level of 1.3400 — not highlighted on the chart — could be paved to be the next support level above which the price will consolidate and from where the next movement will begin. If this happens, the 1.3500 level is the next target.
On the flip-side, if 1.3349 gives way, then 1.3268 may receive a visit.

Levels to keep an eye on:

D1: 1.3502 1.3261 1.3000
H4: 1.3269 1.3349 1.3400 1.3500

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Original from: www.earnforex.com