GBP/USD has been trading in a rising mode since yesterday, after it hit support at 1.3575, and today, it managed to overcome the 1.3675 barrier, marked by the high of October 11th. This confirmed a forthcoming higher high and combined with the fact that the pair is trading above the upside support line drawn from the low of September 30th, paints a positive short-term picture.
We expect the bulls to challenge the 1.3750 zone soon, marked by the high of September 23rd, where a break could pave the way towards the peak of September 17th, at 1.3813. If the bulls are not willing to stop there, a break higher could extend the advance towards the high of September 15th, at 1.3854, or even the peak of the day before, at 1.3913.
Taking a look at our short-term oscillators, we see that the RSI just emerged above 70 and continues to point up, while the MACD lies above both its zero and trigger lines, pointing north as well. Both indicators detect strong upside speed, which supports the case for further advances.
On the downside, we would like to see a clear dip below 1.3545, the low of October 6th, before we abandon the bullish case and start looking to the downside. This could confirm the break below the upside line taken from the low of September 30th, and it could open the path towards the 1.3445 or 1.3412 territories, with the latter marking the low of September 29th. If that barrier is not able to support the pair this time around, its break may set the stage for extensions towards the 1.3305 area, defined by the low of December 22nd.
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