GBP Index rises to top of bullish channel

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Now perfectly held at key major GBP% index channel resistance (which suggests GBPUSD 1.7119 as the top) we may see some profit taking bring the pound lower. It is hard to argue with the pounds bullishness at the moment though so there remains a chance that this bullish channel is not steep enough to contain price action and we could see a break above to force a redraw of the charts. Taking a look at EURGBP though there are clues that we may have topped for GBPUSD in the short to medium term, although it is far too early to call yet. With the cross typically the inverse of the GBP% index the failure to break lows during today’s session for EURGBP may see some upside there weaken the pound, especially considering how oversold the dollar is. This would align neatly if we see a rebound in the Euro as ECB rate cut bets unwind and accelerate the Euro higher. As such we have a lot of headroom above for EURGBP before the top of the bearish channel is tested. The alternative scenario is a dollar bounce which will see the Europeans hold within already defined ranges and channels for now, although we currently have no way of knowing which will happen of these two so should keep a keen eye on price action for clues. GBPUSD 1.7119 is the level to watch for a break or rejection. I am neutral GBP until the channel is broken to the upside or we begin a retracement
**GBP% Index Resistance: GBPUSD 1.7068, 1.7109**
**GBP% Index Support: GBPUSD 1.7008, 1.6922**
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