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GBP/USD: Upside Bias Despite Volatility Technical Analysis

Cable had been forming a flag pattern on the 4-hour chart but then some sudden volatile price moves led to a break - first of support to the down-side and then of resistance to the upside - all in one day. That up-move has since pulled-back into the range again where it is currently consolidating.

My expectations continue to be for a bullish continuation higher despite the strange volatile price action of the previous day, which technically speaking formed a key reversal. Because price action recovered after it broke lower and ended the day bullishly, however, I don't see the key reversal as a strong bearish signal.

For a continuation of the trend higher, I would like to see a break above the previous day's new highs at 1.7190, with an initial target at the R1 monthly pivot situated at 1.7250.

Analysis by: Liga Forex Analyst