GBP/USD on Brink of Breakout as Bollinger Bands Signal Potential Move

The GBP/USD pair has been trading within a narrow range of $1.3011 to $1.3867 for approximately 15 months, despite rising volatility in other market segments.

A closer look at the technical charts reveals that the Bollinger Bands, which measure volatility over a 20-month period, are indicating mounting pressure on the pair.

The bands themselves are made up of three lines: the middle line is the moving average for the last 20 months, while the upper and lower bands widen with higher volatility and contract during periods of calm.

According to technical analysis, a break below the 20-month moving average could open the road to support around $1.2945, which is roughly at the level of the 100-month moving average.