Cable Looking Weak, Bearish Sentiment Prevails
Key Takeaways:
- Critical Resistance: Bulls face resistance at 1.2644, struggling to maintain momentum.
- Candlestick Patterns: 'Bearish Engulfing' signals potential reversal, while 'Pin Bar' suggests bullish sentiment.
- Moving Averages & Fibonacci Levels: Price fluctuates amid DEMA and EMA. Fibonacci retracement at 0.5 acts as crucial battleground for bulls and bears.
GBP/USD H4 Time Frame Technical Market Outlook:
The GBP/USD pair has retraced 50% of the last wave down and is currently consolidating around the key short-term supply zone located beteen the levels of 1.2625 - 1.2598. It looks like the level of 1.2644 is too strong for the bulls and more Pin Bar candles with a long upper shadows are being made around this level. The momentum is still hovering aorund the neutral level of fifty on the H4 time frame chart, so any breakout higher would trigger another up wave towards the 61% Fibonacci retracement level seen at 1.2675. Nevertheless, the bulls are lloking weak on the current levels and can reverse any time now. The intraday technial support is seen at the level of 1.2612 and 1.2570.
Candlestick Patterns:
The H4 chart has marked a 'Bearish Engulfing' pattern, which suggests that bears have overtaken the bulls and could indicate a potential reversal to the downside. A 'Pin Bar' candlestick is visible at the bottom of the downtrend, which typically represents a bullish reversal signal.
Moving Averages:
The price is between the 50-period Double Exponential Moving Average (DEMA) and the 100-period Exponential Moving Average (EMA). The DEMA is above the EMA, which could be interpreted as a bullish crossover signal. However, the price is currently below the DEMA, indicating some bearish pressure.
Fibonacci Retracement Levels:
The H4 chart features Fibonacci retracement levels drawn from a recent high to a low. The price has surpassed the 0.382 level and is hovering around the 0.5 level, which is often considered a key area of resistance or support.
Support and Resistance:
There are clearly defined resistance levels above the current price, marked by horizontal lines, with an immediate resistance level at around 1.2625. Support levels are also identified below the current price, with the closest significant support near the 1.2605 level.
GBP/USD H1 Intraday Indicator Signals:
- 11 out of 23 technical indicators are showing Sell, 4 indicators showing a Buy signal, 6 indicators ais Neutral
- 11 out of 18 moving averages are showing Sell signal and 7 showing Buy signal
Sentiment Scoreboard:
The general sentiment on the scoreboard is bullish (59% vs.41% bears). Last week sentiment is bullish as well (56% bulls vs.44% bears) and the last three days sentiment is bullish again (63% bulls vs.37% bears).
Weekly Pivot Points:
WR3 - 1.26759
WR2 - 1.26452
WR1 - 1.26306
Weekly Pivot - 1.26145
WS1 - 1.25999
WS2 - 1.25838
WS3 - 1.25531
Bullish Scenario:
- If the price maintains above the 0.5 Fibonacci level and the DEMA crosses above the EMA, it could signal a stronger bullish trend.
- A push above the immediate resistance could lead to the price targeting the next resistance level at the 0.618 Fibonacci level.
- Sustained buying pressure with a rise in RSI above 60 could further confirm the bullish sentiment.
Bearish Scenario:
- If the price fails to hold the 0.5 Fibonacci level and falls below the DEMA, this could indicate a bearish reversal.
- A drop below the support at 1.2605 could lead to a further decline towards the 0.382 Fibonacci level or lower.
- A fall in RSI below 50 would support the bearish outlook, indicating increased selling pressure.
Useful Links
Important Notice
The begginers in forex trading need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp market fluctuations due to increased volatility. If you decide to trade during the news release, then always place stop orders to minimize losses.
Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. For successful trading, you need to have a clear trading plan and stay focues and disciplined. Spontaneous trading decision based on the current market situation is an inherently losing strategy for a scalper or daytrader.
