GBP/USD Price Forecast: Reversal Signals on GBP vs USD Chart
GBP/USD Price Technical Outlook
- Bears Show More Sway
- Key Levels and threshold to consider
On Thursday, British Pound fell to its lowest level in thirty-five years at 1.1411. The price rallied as bears seemed to cover. In the following day, the market closed the weekly candlestick in the red with nearly 5.1% loss. This week, bears eased up more allowing GBP/USD to rally further.
The Relative Strength Index (RSI) abandoned the oversold territory, highlighting a weaker downtrend momentum.
GBP/USD DAILY PRICE CHART (Nov 14, 2018 – MaR 25, 2020) Zoomed out
GBP/USD DAILY PRICE CHART (JAN 30– Mar 25, 2020) Zoomed IN
From the daily chart, we noticed that on Friday GBP/USD rallied to current trading zones 1.1550 – 1.1958. On Monday, the market failed to close below the low end of the zone reflecting further hesitation from bears. This led the price to really eyeing a test of the high end of it.
A close above the high end of the zone may lead GBPUSD to raise towards 1.2195. Further close above that level could extend the rally towards 1.2364. That said, the daily and weekly resistance levels marked on the chart (zoomed in) should be watched along the way.
In turn, any failure in closing above the high end of the zone could mean more of the same i.e. the price could point lower towards the low end of the zone. Further close below that level could send GBPUSD towards 1.1250. Nevertheless, the daily support level underscored on the chart should kept in focus.
GBP/USD Four Hour PRICE CHART (Mar 7 – Mar 25, 2020)
Looking at the four-hour chart, we noticed that yesterday GBP/USD rallied above the downtrend line originated from the March 13 high generating a bullish signal. Today, the market has violated the neckline of double bottom pattern (reversal formation) located at 1.1935 eyeing a test of 1.2360.
Thus, a break above 1.1986 could provide another bullish signal. This could cause a rally towards 1.2108. Although, the daily resistance level underlined on the chart should be considered. On the other hand, a break below 1.1714 might send GBPUSD towards 1.1580. Yet, the daily support level printed on the chart should be monitored.
See the chart to find out more about key levels Cable 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.