Red lines- bearish channel
Green lines- bullish RSI divergence
GBPUSD is trading around 1,2074. Short-term trend remains bearish as price continues making lower lows and lower highs. Price bounced briefly towards 1.2270, but bulls remain weak and price made a new lower low. The RSI however did not follow. The RSI formed a higher low. The bullish RSI divergence suggests that the downtrend is weakening. However this is not a reversal signal. Another bounce in GBPUSD is imminent this week. Downside potential is limited. Traders better look to take profits and cover their positions. Opening new short positions at current levels is very risky.
