- GBPUSD has been trending higher along an upward sloping channel on short-term charts.
- The technical set-up favours bullish traders and supports prospects for additional gains.
- A sustained break below the 1.3200 handle is needed to negate the constructive outlook.
GBPUSD gained traction for the fourth consecutive session on Wednesday amid hopes that Britain and the European Union could reach a Brexit divorce agreement by the beginning of next week. The recent move up has been along an upward sloping channel extending from September monthly swing lows, which points to a well-established short-term bullish trend.
The constructive outlook is further reinforced by the fact that the pair is holding comfortably above its important daily moving averages – 50, 100 & 200-day SMAs. Adding to this, bullish technical indicators, which are still far from being in the overbought territory, support prospects for an extension of the upward trajectory.
Hence, some follow-through strength towards challenging the top boundary of the mentioned trend-channel, currently near the 1.3340 region, remains a distinct possibility. On the flip side, any meaningful pullback might now be seen as a buying opportunity and remain limited near the 1.3200 handle. This, in turn, should now act as a stop-loss level for near-term bullish positions.
A convincing breakthrough now seems to accelerate the fall towards the 1.3165-60 intermediate support before the pair eventually drops to the next major support near the 1.3115-1.3100 zone.