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GBP/USD Nears A Downside Break – British Pound to USD Price Outlook

GBP/USD Nears A Downside Break – British Pound to USD Price Outlook

2019-11-07 11:24:00
Mahmoud Alkudsi, Market Analyst
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GBP/USD Technical Forecast

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GBP/USD – From Bullish to Sideways

Since the end of last week, GBP/USD uptrend move has been losing momentum. Buyers could not retest 1.3000 handle on one hand, nor they were successful to overtake the Oct 30 high at 1.2976 on the other. This resulted with a sideways move and a reversal may be on the way to happen.

Alongside this, the Relative Strength Index (RSI) declined from 68 to 59 highlighting weaker uptrend impulse.

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GBP/USD DAILY PRICE CHART (Nov 1, 2017 – Nov 7, 2019) Zoomed out

GBPUSD price daily chart 07-11-19 Zoomed out

GBP/USD DAILY PRICE CHART (June 1 – Nov 7, 2019) Zoomed IN

GBPUSD price daily chart 07-11-19 Zoomed in

From the daily chart, we notice on Oct 30, GBP/USD rebounded nearby the high end of current trading zone 1.2785- 1.3048. Later, the price pointed lower creating a double top pattern where the neckline resides at the low end of the zone as discussed in last week update.

This suggests that if the price breaks and remains below the low end of the zone , it would press towards 1.2550. Further close below this level could see GBPUSD trading even lower towards 1.2360. Nevertheless, the daily and weekly support levels underlined on the chart (zoomed in) should be watched closely.

That said, if sellers fail in forcing a close below the low end of the zone, this could cause GBPUSD to continue its sideways move i.e. pullback towards the high end of the zone.

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GBP/USD Four Hour PRICE CHART (Oct 1 – Nov 7, 2019)

GBPUSD price four hour chart 07-11-19

Looking at the four-hour chart, we notice on Friday GBP/USD U- turned and traded lower creating the second top of double top pattern discussed above on the daily chart.

Thus, sellers could end current sideways move if GBPUSD breaks below 1.2706. This could lead the price towards 1.2616. Although, the weekly support level underscored on the chart should be considered.

On the flip-side, buyers could end current sideways move with a break above 1.3028 hinting towards 1.3072. In that scenario, the weekly resistance level marked at 1.3048 should be monitored.

See the chart to find out more about key levels GBPUSD would encounter in a further bearish /bullish scenario.

Written By: Mahmoud Alkudsi

Please feel free to contact me on Twitter: @Malkudsi

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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