The British pound has weakened against the US dollar since the beginning of this week. That's the British pound (GBP) has fallen over 2.5% against the US dollar (USD) since the start of the week, which is significant, especially since these are the two major currencies of the world. The drop has also concentrated in this week. The GBP/USD pair continues to move downwards from the level of 1.1589. Yesterday, the pair dropped from the level of 1.1589 (this level of 1.1589 coincides with the ratio of 61.8%) to the bottom around 1.1349. The GBP/USD pair is part of a very strong bearish trend.
Traders may consider trading only short positions (for sale) as long as the price remains well below 1.1497. The next support located at 1.1349 is the next bearish objective to target. A bearish break of this support would revive the bearish momentum. The bearish movement could then continue towards the next support located at 1.1349. Below this support, sellers could then target 1.1349. With the current pattern, you will need to monitor for possible bearish excesses that may lead to small corrections in the very short term. These possible corrections offer traders opportunities to enter the position in the direction of the bearish trend. Trying to profit from the purchase of these possible corrections may seem risky. Today, the first resistance level is seen at 1.1497 followed by 1.1543, while daily support 1 is found at 1.1349.
Also, the level of 1.1497 represents a weekly pivot point for that it is acting as major resistance/support this week. Support becomes a resistance at the level of 1.1497. The GBP/USD pair fell with UK inflation elevated and still rising, the cost of living crisis taking hold, growth slowing and ongoing Brexit woes, the outlook for the pound is deteriorating. Meanwhile, the USD is supported by safe-haven flows and hawkish Federal Reserve (Fed) bets. Amid the previous events, the pair is still in a downtrend, because the GBP/USD pair is trading in a bearish trend from the new resistance line of 1.1380 towards the first support level at 1.1349 in order to test it. If the pair succeeds to pass through the level of 1.1349, the market will indicate a bearish opportunity below the level of 1.1349. The trend is still bearish as long as the price of 1.1497 is not broken. On the day, this instrument gained +0.94% with the lowest point at 1.1349 and the highest point at 1.1400. The deviation from the price is +0.95% for the low point and -0.05% for the high point.
Thereupon, it would be wise to sell below the price of at 1.1497 with the primary target at 1.1349. Then, the GBP/USD pair will continue towards the second target at 1.1300. The market is indicating a bearish opportunity below the above-mentioned support levels, for that the bearish outlook remains the same as long as the 100 EMA is headed to the downside. However, the price spot of 1.1497 remains a significant resistance zone. Thus, the trend will probably be rebounded again from the second support as long as the level of 1.1497 is not breached. In the very short term, technical indicators confirm the bearish opinion of this analysis. It is appropriate to continue watching any excessive bearish movements or scanner detections which might lead to a small bullish correction.
Forecast :
Today, resistance is seen at the levels of 1.1497 and 1.1300. So, we expect the price to set below the strong resistance at the levels of 1.1497 and 1.1400; 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. Thus, it will be good to sell below the level of 1.1497 or 1.1400 with the first target at 1.1349 and further to 1.1300 in order to test the daily support. If the GBP/USD pair is able to break out the daily support at 1.1300, the market will decline further to 1.1250 to approach support 3 in coming hours or days. On the other hand, the price spot of 1.1497 remains a significant resistance zone. Therefore, the trend is still bearish as long as the level of 1.1497 is not breached.
