GBPUSD is trading above 1.3050. Price has been trading over the last few days inside a wedge pattern making lower lows and lower highs. The RSI did not follow and has produced bullish divergence warning signals. In previous posts we warned traders that this combination increases the chances of a reversal specially if price breaks above the upper wedge pattern boundary.
Green line- bullish divergence
Red lines- downward sloping wedge pattern
GBPUSD is challenging today the upper wedge pattern boundary. Price for now is slightly above the upper boundary providing a bullish signal. It is important at the end of the day to see where the pair closes. Traders need to be patient. We might see a rejection at the wedge resistance. If the break out is confirmed, then bulls will need to push price even higher and hold above recent lows at 1.2999. If GBPUSD does produce a bullish signal, our first bounce target will be at 1.34.