FX.co ★ Intraday technical levels and trading recommendations for GBP/USD for January 3, 2014

The daily chart shows the GBP/USD pair is moving within an expanding wedge pattern since September 10.

Daily breakthrough above 1.6240-1.6300 took place during December where another consolidation range was established between 1.6240-1.6450 untill the last bullish impulse was expressed towards 1.6570-1.6600 in an attempt of bulls to record new highs in 2013.

The upper limit of the wedge has rejected the GBP/USD pair many times during December. The last rejection took place when bearish pressure was applied Yesterday off the level of 1.6600.

The nearest dependable DAILY demand (support) level is located at 1.6250.

4H chart shows the same view with more details. Failure of the bears to push lower within the descending channel allowed the bulls to initiate a strong bullish impulse mentioned above.

The 4H chart looks bullish as long as the bulls are defending their DEMAND zone between 1.6300-1.6240

Our short-term scenario is that the GBP/USD pair will probably pursue further bearish retracement towards 1.6300 where another bullish swing may be initiated then shoot for new highs.