GBP/USD setting up for an extended move

GBP/USD is looking to set itself up nicely for an extended upward move and traders will be looking to buy it on dips to its retracement levels. The first good retracement level can be seen around 1.5750 level and long term as well as Intra-day traders will be really interested in buying around that level.  The initial resistance level and the primary target can be seen around 1.5885 level but mostly traders will look to extend profits towards 1.6000 level and use of trailing stop will be very useful in this respect.

Looking at the moving averages used in daily charts, it can be seen that GBP/USD is gradually moving below the short term moving average and is now looking to target 1.5600 level around which long term moving average and medium term moving averages are crossing each other. This seems to be an ideal entry point especially for long term traders. Looking at the RSI used in daily charts, it can be seen that it has dropped to 62 after touching almost 70 and thus seems to have open up reasonably and in case GBP/USD takes further retracement towards 1.5750 level, RSI will really open up to allow GBP/USD to make an extended move towards 1.6000 level.

 

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