The GBP/USD pair has entered into a resistance zone on a 4 hour time frame (which is mentioned below). The price has gone deep in this resistance zone and this confirms that there may not be enough sellers to push the price down. We have also broken the downward wedge pattern and the projections of this pattern could push the price towards the 1.5043 mark.
The price has also pierced the Bollinger band at a minor resistance zone (as shown in the chart below) and this confirms that the volatility is high. The piercing of the Bollinger band does have a significant importance amid some traders, as they do deem this is as an opportunity to buy or sell. The significance of the piercing of the Bollinger band is even higher when this takes place at an important level of support or resistance. Under the current circumstances, it has taken place at a minor resistance zone.
The reading for the Bollinger the upper and lower bands are 1.4639 and 1.4489 respectively.
The RSI is trading at 67.10 which is near the overbought territory and this may push the price lower. However, the RSI indicator is trading in the same direction as the price action confirming that the price has momentum behind it.
By Naeem Aslam