GBP/USD: Extremely overbought conditions to trigger fall

GBP/USD rises to 1.31130, up 0.15% on a day, but Friday's 4-hour chart is pointing to extremely overbought conditions. Yohay Elam, an analyst at FXStreet, expects the cable to fall with first support seen at 1.3070.

Key quotes

“The Relative Strength Index on the 4-hour chart is pointing to extremely overbought conditions, around 85. GBP/USD appears over-stretched also on the daily chart. Cable broke above the uptrend channel that had accompanied it since last week, but this move may prove unsustainable.” 

“The recent high of 1.3145 is the first level to watch. It is followed by 1.32, a high point in March. Further above, 1.3270 and 1.3330 are the next level to watch.”

“Support awaits at 1.3070, a line that played a role in February. The next cushion is 1.3010, a temporary resistance line on the way up. Next, 1.2970 and 1.2910 await it.”