GBP/USD Trading In an Uptrend Channel

GBP/USD (daily chart as of September 23, 2013) broke out above a large trading range from around1.4830 to 1.5750 (two bold red lines on the chart) on September 11, and overshot the upper edge of the uptrend channel (bold green parallel lines) that extended back to July 9 and reached a high of 1.6162 on September 18 after the Fed’s no tapering decision. Price then retreated back into the channel on September 19.

The currency pair needs to hold the daily EMA 20 for more upside momentum. The resistance levels above are 1.6162 (September 18 high) and 1.6337 (January 2 high). In the event of price breaking down the EMA 20, the support levels below are 1.5885 (September 17 low) and 1.5770/50 (major support/resistance). The MACD is making a second bullish crossover above the zero line, and the RSI is falling from above 80.