The drawn trendline on this chart has acted as an incredibly strong resistance during the current uptrend of the GBP against the USD. Since the breakout of this trendline there has been one retest as a level of support within a relatively short timeframe, with the test pullback being at the 1.25 price level. With the analysis of one or more tests of this trendline as a level of resistance there could be potential to take future long positions when this trendline is tested. One factor that cannot be ignored in this chart however, is the incredibly strong, historically tested, level of resistance around the 1.25 price level. This resistance and the visible trendline form a wedge pattern that could see a likely breakout in the near future. The direction that I will judge this breakout to be will be largely dependant on the candlestick patters formed during the next test of the resistance zone. It should also be noted that along with this price action analysis, the recent fundamentals concerning this pair seem to be bullish-incentive related in nature.
In terms of taking a long position upon judging that the pair will break the resistance zone around 1.25, a relatively large breakout should be expected.
In terms of taking a long position upon judging that the pair will break the resistance zone around 1.25, a relatively large breakout should be expected.