GBP/USD: A Deep Correction Needed or Not? (Technical Breakdown)

The pound is on a very strong road to the north, being supported as detailed in the Investing article, by a wide range of fundamental factors.

Now let’s take a look at whether these reasons are enough to keep GBP/USD going at its current pace, without any deep correction being needed.

Price action has been one-directional as the pair is currently on a five straight month bull run, as well as consecutive closing in the green for the past seven weeks. GBP/USD was able to successfully tackle 1.4000, a big psychological barrier.

Given this clearance, the door has been left open to challenge the top area in 2018, a zone ranging from around 1.4200 - 1.4380. There isn’t much in the way of major resistance until the pair manages to reach this noted region.

What am I looking for?

I want to see how GBP/USD deals with the above-detailed zone, in an ideal scenario for the bulls is to reach this area and start consolidating, without any harsh rejections. If some stability can be found here and be used as demand, then I expect another surge, with 1.5000 in mind.

There would be a decent possibility of seeing a technical wick-fill of the huge bearish candle, which was produced when Britain voted yes to leave the EU. It was produced in the week commencing 20 June 2016, and will likely be of interest to the bulls in achieving the return to pre-vote levels.

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