The trend of GBP/USD pair movement was controversial as it took place in the downtrend channel. Due to the previous events, the price is still set between the levels of 1.2322 and 1.2171, so it is recommended to be careful while making deals in these levels because the prices of 1.2322 and 1.2171 are representing the resistance and support respectively. Therefore, it is necessary to wait till the downtrend channel is passed through. Then the market will probably show the signs of a bearish market. In other words, sell deals are recommended below the price of 1.2322 with the first target at the level of 1.2171 . From this point, the pair is likely to begin an descending movement to the price of 1.2171 with a view to test the daily support 2 at 1.2116. - The support of GBP/USD pair has broken; it turned to resistance around the price of 1.2322 last week. Thereby, forming a strong resistance at 1.2322. The level of 1.2322 coincides with the golden ratio (78% of Fibonacci retracement) which is acting as major support today. Another thought; the Relative Strength Index (RSI) is considered overbought because it is above 70. At the same time, the RSI is still signaling a downward trend, as the trend is still showing strong below the moving average (100) on the hourly chart, this suggests the pair will probably go down in coming hours. Accordingly, the market will probably show the signs of a bearish trend.
Forecast
If the pair fails to pass through the level of 1.2322, the market will indicate a bearish opportunity below the strong resistance level of 1.2322.
In this regard, sell deals are recommended lower than the 1.2322 level with the first target at 1.2171. It is possible that the pair will turn downwards continuing the development of the bearish trend to the level 1.2161.
Moreover, the price will fall into the bearish market in order to go further towards the strong support at 1.2027 to test it again. Furthermore, the level of 1.2027 will form a double bottom.
However, stop loss has always been in consideration thus it will be useful to set it above the last double top at the level of 1.2405 (notice that the major resistance today has set at 1.2405).
