FX.co ★ GBP/USD activates bullish pattern

The GBP/USD pair climbed as much as 1.2446 today, registering a new high. Now, it has dropped a little and is trading at 1.2404 at the time of writing. After its strong rally, a retreat was natural. It could test and retest the immediate support levels before jumping higher again.

Fundamentally, the UK BRC Shop Price Index reported a 9.0% growth compared to 8.8% growth in the previous reporting period. Still, the greenback took the lead and dragged the rate down as the US CB Consumer Confidence, HPI, and S&P/CS Composite-20 HPI came in better than expected.

GBP/USD Retest The Buyers!

As you can see on the H1 chart, the rate registered an aggressive breakout through the downtrend line and above the former high of 1.2395 signaling a potential reversal.

It has found resistance at the weekly R1 (1.2440) and now it has dropped a little. It has registered only a false breakout indicating exhausted buyers, that's why the rate could test and retest the 1.2395 - 1.2398 area, the weekly pivot point of 1.237, and the downtrend line.

GBP/USD Outlook!

Testing and retesting the immediate support levels, registering false breakdowns may announce a new bullish movement. This is seen as the first buying opportunity. Still, a great long opportunity could appear after making a new higher high, after making a valid breakout through R1 (1.2440).