GBP USD Reaches Back Up to 1 5500 Level

GBP/USD (daily chart shown below) has spent the past week climbing back up to key resistance around the 1.5500 level from its recent base under 1.5200 in early June.

This rebound follows a precipitous drop during the latter half of May from the currency pair’s 2015 high of 1.5813 that was reached in mid-May.

In the process, the 50-day moving average has just risen to touch the 200-day moving average. These two moving averages have not touched since September of last year, when a downside cross occurred and a prolonged bearish trend followed. The current touch is in the opposite direction.

With any sustained trading above the 1.5500 resistance level, a bullish moving average cross could occur with the next major upside target residing around 1.5800 resistance, the level of the noted 2015 high in May.

Despite the current rise, however, the currency pair is still trading within the bounds of a prolonged downtrend that originated from the 1.7190 high in July of last year. On any impending retreat and breakdown below the key 1.5250 support area, GBP/USD should subsequently target its major downside support objective at 1.5000.

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