FX.co ★ GBP/USD intraday technical levels and trading recommendations for September 3 , 2013

Strong bullish pressure was seen during retesting 50% Fibonacci, resulting in bullish engulfing candlestick extending further above 1.5400 (61.8% Fibonacci). This opened the way directly to 78% Fibonacci around 1.5550 which constituted temporary intraday resistance that held the price below for 5 days before bullish breakout took place on August 15.

The cable established ascending bottoms around 1.4800, 1.5100, 1.5210 and recently 1.5420, those bottoms have been supporting the ongoing uptrend so far.

Key Supply Zone is placed near 1.5750 and would be a clear target area for anyone buying this market. However, bearish rejection is witnessed around 1.5590 yesterday and once more today off 1.5602 (a possible level for the right shoulder of the expected Head and Shoulder's pattern).

Key demand levels is placed around 1.5430 where we can look for bullish price action to get back in line with the uptrend if the market invalidates the reversal pattern.

Based on the chart above, the cable was trending up within the depicted ascending wedge, the upper limit of which is around 1.5690-1.5700 provided significant supply supported by the overbought state of the pair.

Bearish pressure was applied to visit the minor uptrend line located around 1.5560 which was broken down opening the way towards 1.5540 (78% Fibonacci Level and a previous broken top).

The price level of 1.5530 is a prominent target for the sellers off 1.5690. However, fixation below 1.5540 enabled the bears to push towards 1.5430 where an ascending uptrend line comes to meet the pair probably providing a valid BUY entry with SL located below 61.8% Fibonacci around 1.5390.

Today, the Organization for Economic Cooperation and Development (OECD) raised growth forecasts for Germany, France and the United Kingdom while lowered expectations about the possibility of having more economic growth in the United States. This lead to another bullish push above Yesterday's high reaching 1.5602 level before bearish pressure was applied.

Fixation above 1.5530 is vital for the bulls to keep pushing higher. However, failure to do so will probably activate a bearish Head and Shoulders reversal pattern.