By: Mike Kulej
The US Dollar has been under pressure against most other currencies. It lost a lot of ground to the Euro and the Australian Dollar. By comparison, the British Pound has been less robust recently, which is clearly reflected on the daily chart of the USD-GBP.
Between May and early August, this pair showed strong gains, rallying from 1.4465 to almost 1.6000, breaking the key resistance of 1.5525 in the process. This event established a new uptrend, which is still unfolding.
Since then, however, the GBP-USD has not kept pace with other dollar pairs. It pulled back to roughly the past resistance, which had changed into a support, and failed to make a new high last week.
There is no question about the general trend of the GBP-USD. Smoothing out the price, the 150 pips Renko chart is moving north while in a steady, if gradual, fashion. The GBP-USD is above both the 100 SMA and the up trendlines.
That said, the main trendline has a shallow angle and the MACD is barely above the zero line, pointing to a relative weakness of this up trend. In order to increase the bullish momentum, the key resistance at 1.6000 must be broken decisively, something to watch for this week.
