Forex: GBP/USD: Pound capped at 1.7005 again

FXstreet.com (Barcelona) - The Pound launched an assault to 1.7000 resistance area during European session, buoyed by encouraging UK services and manufacturing data, although its rally from 1.6950 was capped at 1.7005, before pulling down to levels around 1.6970 at the time of writing.

According to technical analyst at Charmer Charts, the Pound could break above 1.7000 heading to 1.72: "Now today the market does remain looking as though it could trade higher back to 1.7005. Here will be quite crucial. The sellers failing to hold off buyers will see this then trade higher with 1.72 targeted. 1.72 is the measured target from the continuation pattern we experienced all through June and July."

On the downside, failure to break 1.7005 would shape a double top on the hourly charts, says . "If today 1.7005 holds there will be a double top on the hourly charts. This suggests that given the overbought scenario Cable will retrace some of the recent gains to at least its break point of 1.6830. Buyers will be waiting here, but there is scope for the sellers to take them on and drive this lower for 1.6740."