Instead, market participants pushed the GBP/USD above the 1.3850 level. Now, its next target is the level of 1.3900.
The 1.3900 level is also the resistance area which the pair has already faced on July 6, 12, 13, and 15.
In other words, this is a strong resistance level where the pair may get stuck. It will inevitably lead to a reduction in the volume of long positions. This is exactly what is happening now in the market.
The market dynamic reflects the current demand, triggering high volatility.
Now, the pair seems to get stuck near the 1.3900 level. So, it had to retreat a little bit.
Judging by the trajectory of the pair in the past, it is unlikely to break above this level.
So, it may enter the correctional phase from the resistance level of 1.3900 and slip to 1.3775.
There is also an alternative scenario suggesting that the pair may consolidate above 1.3910. If so, it may even rise to the psychological level of 1.4000.
Currently, the 1M chart signals short trades after the pound/dollar pair bounced off the resistance level. Contrary, the 1H and daily charts show a bullish bias, indicating the development of an upward movement in the market.
InstaForex Group