Overview :
The GBP/USD pair steep decline spells for a capitulation event underway from the levels 1.2407 and 1.2554. More price decline is likely to occur, but traders should consider the bearish thesis event until 1.2407 is broken.
The GBP/USD pair dropped sharply from the level of 1.2407 towards 1.2318. Now, the price is set at 1.2318. On the H1 chart, the resistance of GBP/USD pair is seen at the level of 1.2407 and 1.2554.
It should be noted that volatility is very high for that the GBP/USD pair is still moving between 1.2407 and 1.2206 in coming hours.
Moreover, the price spot of 1.2427 remains a significant resistance zone. Therefore, there is a possibility that the GBP/USD pair will move downside and the structure of a fall does not look corrective.
In order to indicate the bearish opportunity below 1.2427, sell below 1.2427 with the first target at 1.2260 in order to test last week's bottom.
Also, it should be noticed that support 1 is seen at the level of 1.2260 which coincides the daily double bottom.
So, we expect the price to set below the strong resistance at the level of 1.2427; because the price is in a bearish channel now. The RSI starts signaling a downward trend. Consequently, the market is likely to show signs of a bearish trend.
Additionally, if the GBP/USD pair is able to break out the bottom at 1.2260, the market will decline further to 1.2177 in order to test the weekly support 2.
