The GBP/USD pair has broken support at the level of 1.1618 which acts as a resistance now. According to the previous events, the GBP/USD pair is still moving between the levels of 1.1618 and 1.1442.
Therefore, we expect a range of 176 pips in coming two days or three. The trend is still below the 100 EMA for that the bearish outlook remains the same as long as the 100 EMA is headed to the downside. Hence, the price spot of 1.1618 remains a significant resistance zone.
Consequently, there is a possibility that the GBP/USD pair will move downside. The structure of a fall does not look corrective. In order to indicate a bearish opportunity below 1.1618, sell below 1.1618 with the first target at 1.1442.
Furthermore, the price has been set below the strong resistance at the level of 1.1618, which coincides with the 38.2% Fibonacci retracement level. This resistance has been rejected several times confirming the downtrend. Additionally, the RSI starts signaling a downward trend.
Besides, the daily support 1 is seen at the level of 1.1442. If the pair fails to pass through the level of 1.1442, the market will indicate a bearish opportunity below the level of 1.1442. So, the market will decline further to 1.1400 in order to test the daily support 2.
Market analysis > Technical analysis :
The GBP/USD pair dropped from the level of 1.1618 to the bottom around 1.1517 . But the pair has rebounded from the bottom of 1.1618 to close at 1.1517. Today, the first support level is seen at 1.1442, and the price is moving in a bearish channel now. As a result, if the EUR/USD pair is able to break out the first support at 1.1400 , the market will decline further to 1.1365 in order to test the daily support 3.
However, traders should watch for any sign of a bullish rejection that occurs around 1.1618. The level of 1.1618 coincides with 38.2% of Fibonacci, which is expected to act as a major resistance today. Since the trend is below the 38.2% Fibonacci level, the market is still in a downtrend. Overall, we still prefer the bearish scenario.
