Technical analysis of GBP/USD for August 19, 2016

I warned the GBP/USD bears that a bounce towards 1.32 was imminent after a breakout of the bullish wedge formation that started on August 3rd. The price has broken out and above the wedge and has reached the 61.8% Fibonacci retracement of the decline.

The blue lines - bullish wedge

The price has reached the 61.8% Fibonacci retracement of the decline which is an important juncture point. A bearish reversal may start from this area. Next resistance is the 78.6% Fibonacci retracement. Support is at 1.3070.

A break above 1.3260-1.3350 could push the price towards 1.35-1.36 and the weekly cloud resistance area. This is a sell area, and bears are not going to give up easily. I believe the US dollar will strengthen against the pound again, and we will see another round of selling that will eventually push the pair towards 1.25.The material has been provided by InstaForex Company - www.instaforex.com