FX.co ★ Technical analysis of GBPUSD for August 10, 2016

GBPUSD remains in a strong downtrend as it has broken below 1.3170 and 1.3050 critical support levels I mentioned in my last post. With the pair trading below 1.30 I believe we are close to a big bounce even towards 1.32 for a re-test of the breakdown levels.

Blue lines - bullish wedge

In the 4 hour chart I see a downward sloping wedge being formed and combined with oversold diverging stochastic indicator the chances of a bounce are high, therefore bears must be very cautious and protect their short positions. Resistance is at 1.3020.

On a daily basis we see the breakdown of the long-term triangle pattern and the start of a new downward move that is expected to eventually push price towards 1.25. However, I would wait for a bounce to short this pair and not chase it down here.