GBPUSD remains in a bearish trend making lower lows and lower highs. Price made a new lower low today but in the 4 hour chart the RSI did not follow. Price is forming bullish divergence signs. This is a warning that the downtrend might soon end.
green line - bullish divergence
Blue line- support
Black line - resistance
Price is also forming a downward sloping wedge pattern as shown in the 4 hour chart above with red lines. Resistance by the wedge is at 1.3140. A break above this level will produce a bullish signal. Combined with the bullish RSI divergence, we should then expect GBPUSD to continue higher towards 1.34. The lower wedge pattern boundary is at 1.30.
