The GBPUSD moving higher
The GBPUSD has been trending to the upside today as hopes for Brexit and vaccine helps the currency pair.
Looking at the daily chart, the price moved to new highs in November (taking out the old high at 1.33117) and is looking toward the 1.3400 level. The pair trades at the highest level since September 2. A move above that level and the pair will have it's sites on the September 1 high at 1.34816. The December 2019 high comes in at 1.35139. Those are other upside targets on more upside momentum (see daily chart above).
Drilling to the hourly chart below, the pair moved above the double tops from November 11 and November 18th (between 1.33094 and 1.33116), had some final re-tests of the area in the Asian session (see red numbered circles 3 and 4), before racing higher in the European session.
The price moved above a broken channel trend line and has been able to stay above that level (currently at 1.33502). The high has reached 1.33969 - just short of the natural 1.3400 level.
In a trending market, the pattern tends to follow a step process involving a move higher, and corrections that hold the 38.2-50% of the last "leg" higher (I call them "correction zones"). The 5 minutes chart below shows the buyers showing up in the "correction zone" areas. We are on the 3rd leg higher. The correction zone comes between 1.33736 and a 1.33791. If the price can stay above that level, the buyers remain in control.
A move below is a potential signal that the trend move is reaching some additional resistance (profit-taking as well as new shorts). It is a proxy for potential further correction. In the chart below, the rising 100 bar moving average currently at 1.33574 - and rising - would be a downside target.
