Based on the daily chart of GBP/USD, the pound was among the top performers over the past few days, adding roughly +2.73% versus the U.S. dollar from the bottom point last week. Although the pair eased to grow on Tuesday, triggered by UK CPI data which was in line with expectation (3.0%).
The short-term outlook for the pair, if we look at the 30-minute chart for example, continues its net-long build-up as it’s been constructive in a developing ascending price channel, which started from mid-January. Meanwhile the price is in face of a barrier found on Jan. 15’s high of 1.38194, where it is struggling as of 12:13 p.m. in Sydney. Any breakout for this horizontal resistance level will lead to continuous rise.
With the Commodity Channel Index (CCI) applied on the 30-minute chart, the value of the indicator is positioning in overbought section, which is over 100. If it pulls back to below 100 later, investors should be cautious to continue its net-long decision and waiting to look at what will happen next.
In addition, the MACD continues to rise after pullback triggered by the past few hours’ rise in price. In conjunction with the CCI, when you see there’s a decline in MACD and CCI’s breakout for 100, a chance of reversal in the near term makes investors consider a sell-off action to avoid losses. Otherwise, investors should not hesitate to buy in.
Figure 1: GBPUSD 30-Minute
