The Pound Sterling on the Daily time frame was in a down trend until 20 July, when a last lower bottom was recorded at 1.35719. After the bottom at 1.35719, the market smashed through the 15 and 34 Simple Moving Averages and the Momentum Oscillator broke the zero baseline into bullish terrain. A possible shift in the market momentum from bearish to bullish was further confirmed with many strong bullish candles driving the price significantly higher to make a higher top.
A possible critical resistance level was formed at higher top that was reached on 30 July at 1.39826. Bears are currently trying pull the market lower.
If the Pound manages to break through the critical resistance level at 1.39826, then three possible price targets can be considered from there. Attaching the Fibonacci tool to the higher top at 1.39826 and dragging it to a possible support level near the 34 Simple Moving Average at 1.38432, the following targets can be calculated. The first target is estimated at 1.40687 (161.8%). The second price target can be forecast at 1.42081 (261.8%) and the third and final target might be anticipated at 1.44337 (423.6%).
If the support level at 1.38432 is broken, the above scenario is no longer valid. If the bulls continue to dominate and demand overcomes supply, the outlook for the Cable on the Daily time frame will remain bullish.
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