GBP/USD (daily chart as of September 12, 2013) has held the short-term uptrend line (lower bold green line on the chart) and broke above the strong resistance of 1.5750 with a relatively strong bullish candlestick. Price is currently facing the 3rd strong resistance at around 1.5840, mentioned in our September 5 analysis.
It appears that the currency pair is breaking out of a large trading range from around 1.4830 to 1.5750 (two bold parallel red lines). Note that within the uptrend move that extended back to July 9, price is making higher highs and higher lows with 1.5425 (August 28 low) being the last significant low point. This means that as long as 1.5425 can hold, the recent uptrend move should potentially continue.
We need more follow-through price action to first verify the significance of the breakout, otherwise it could be just another up-leg in the large trading range. Price needs to hold the EMA 20 and the EMA 50 for more upside momentum. The MACD is making a second bullish crossover above the zero line. The RSI is rising and approaching 70, and also approaching the upper edge of an uptrend channel (red channel on the chart), indicating potential resistance ahead.
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