Technical Market Outlook:
The GBP/USD pair has made a Bearish Engulfing candlestick pattern at the H4 time frame at the level of 1.2269 and then reversed lower. The simple ABC corrective cycle might had been completed at this level as well, so now another leg to the downside should be in progress. The level of 1.2193 and 1.2272 will now act as a technical resistance as well, so a breakout above this level of needed in order to rally higher. The momentum is weak and negative, pointing to the downside. Any breakout below the trend line support (orange line on the chart) will likely extend the sell-off towards the level of 1.1937 and 1.1840. Please be aware of the 50 MA and 100 MA bearish cross on the H4 time frame as well.
Weekly Pivot Points:
WR3 - 1.21173
WR2 - 1.20841
WR1 - 1.20688
Weekly Pivot - 1.20509
WS1 - 1.20356
WS2 - 1.20177
WS3 - 1.19845
Trading Outlook:
So far the level of 1.2443 was too strong resistance to break through, so a potential Double Top price pattern is still in play. Moreover, the level of 1.2297 which is 50% Fibonacci retracement level of the last big wave down had been hit, so the bears resumed the down trend. The confirmation of the pattern comes with the level of 1.2089 breakout with a potential target at the level of 1.1840.
