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The British pound currency is looking increasingly bullish on the foreign exchange market against the US dollar after surging above the 1.3800 level and moving back inside a massive triangle pattern.
Technical analysis surrounding the GBPUSD pair is remarkably clear at the moment. Various time frame shows that a move above the 1.3900 resistance level exposes further gains towards the 1.4000 resistance zone.
Important former swing-highs from September 2021 also mark the way forward for bulls this week. The 1.3807 level is a significant swing-high to watch as a breakout zone, as is the 1.3900 level.
However, various forms of technical analysis, such as the Ichimoku and Bollinger Band indicators on the weekly time frame show that 1.4000 level is a clear upside target of the 1.3800 area is taken-out with conviction.
Fundamentally, today’s CPI report from the UK economy should be huge for sterling. A strong number should increase the chance of a November rate increase, and this could turbo-charge the GBPUSD pair higher.
According to the ActivTrader Market Sentiment tool it shows that some 61 percent of traders remain bearish towards the GBUSD pair right now. This is not to overheated considering the 300-point recovery.
Typically, when retail traders are overly bullish rallies can take time to unfold. If bullish sentiment drops, and bearish sentiment rises then we could really start to see the GBPUSD pair rallying.
GBPUSD Short-term Technical Analysis
Looking at the four-hour time frame, the GBPUSD pair has cleared all forms of technical resistance on the Ichimoku cloud indicator. The Bollinger Band indicator on the mentioned time frame shows that the 1.3780 is where the Upper BB is found.
The GBPUSD pair needs to hold above the 1.3650 area this week to maintain short-term upside moment. If bulls can manage to hold above last Friday’s swing low I expect a rally towards the 1.3900 to 1.4000 area in the short-term.
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GBPUSD Medium-term Technical Analysis
According to the daily time frame that the GBPUSD pair has a thin layer of Ichimoku cloud resistance to pierce in order to breakout to towards the 1.4000 area.
The Ichimoku cloud on the monthly time frame clearly highlight that the GBPUSD pair will be clear of cloud resistance once the 1.4000 area is supposed. This could be a slow grind higher until the 1.4000 level is cleared.
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