Daily Forex Update: GBP/USD

The daily chart of the GBP/USD has trended higher since prices were able to bounce from the support, at 1.4229, of the May 20 low. The subsequent rally has taken the pair - known as the "cable" - to 1.5400, where prices are now struggling to find a footing in order to climb higher. The Channel Up pattern that formed with the uptrend has resistance waiting at 1.5440 (A), where the Channel's top line is holding prices from continuing higher. Note, though, that the trendline was in fact pierced - this would, if the uptrend was strong, usually open the door to an Autochartist Continuation of the Trend (ACT) entry long. One look at the four-bar Autochartist Initial Trend reading, however, shows that the cable is no longer maintaining bullish momentum, and has transitioned into a more volatile, sideways market cycle. This market cycle, known as distribution, is characterized by exhaustion at support and resistance, which points a pullback from the upper trend line and a move lower on the daily chart.