FX.co ★ GBP/USD Oversold Conditions are Evident

GBP/USD was into a minor corrective phase, but now it seems determined to jump higher if the US dollar index continues falling. The false breakdown with great separation below the near-term downside obstacles signals bullish momentum.

Today, the US Presidential Election will shake the markets. Technically, GBP/USD has already shown some oversold signs, so the current rally could continue. The price action indicates that the retreat is over, that's why we could search for long opportunities.

GBP/USD Bullish Momentum!

Yesterday's pin bar, false breakdown with great separation below the S1 (1.2858) level, and the static support below 1.2862 signals strong buyers. GBP/USD edges higher and it could close again above the PP (1.2969) level.

The pair is trapped between the 150% Fibonacci line and the upper median line (uml) of the ascending pitchfork. So, only an upside valid breakout from this minor down channel could really validate a larger upside movement.

• GBP/USD Trading Tips

I believe that GBP/USD is in a neutral zone. We may get a buying opportunity if the price registers a valid breakout above the 150% line and through the R1 (1.3056) level. The R3 (1.3255) could be used as an upside target.

If you want to sell it, you should wait for a potential drop and bearish closure under yesterday's low at 1.2855. This scenario could signal that the price will drop towards the median line (ml).