Technical outlook:
GBPUSD reversed sharply after hitting 1.3398 levels yesterday, dropping over 130 pips marking intraday lows around 1.3267 levels. The Cable currency pair is seen to be trading at around 1.3338 levels at this point in writing, expected to resume lower again towards 1.2850 at least. The currency pair faces immediate resistance at around 1.3500, while support is seen towards 1.3200 levels respectively. Also note that GBPUSD has carved a potential shooting star candlestick pattern on the daily chart, hence potential for bearish turn remains high. The overall structure remains bearish over the medium term until prices stay below 1.3488 levels. GBPUSD is expected to drop towards 1.2200 levels in the next few weeks, which is also fibonacci 0.618 retracement of the entire rally between 1.1414 and 1.3488 levels respectively. Also note that the backside of the resistance trend line is also passing through the above zone.
Trading plan:
Remain short, stop @ 1.3500, target is 1.2675 and 1.2200.
Good luck!
