GBP/USD Price Recovery On Hold - Will Bears Comeback?
GBP/USD Price Technical Forecast
- Hesitant bulls led Cable to trade in a narrow range
- Signals and levels to monitor on GBP vs USD chart
GBP/USD- Interrupted Rally
On March 26, GBP/USD rallied as some bears seemed to pull out of the market. This allowed Cable to recover some of its recent losses. Last week, the rally paused reflecting bull’s hesitation to push the price further. On Friday, the weekly candlestick closed in the red with 1.4% loss.
The Relative Strength Index (RSI) remained flat near 50, signaling lack of impulse of uptrend move.
GBP/USD DAILY PRICE CHART (Nov 14, 2018 – April 7, 2020) Zoomed out
GBP/USD DAILY PRICE CHART (JAN 30– APRIL 7, 2020) ZOOMED IN
From the daily chart, we noticed that last week, GBP/USD created four Doji pattern in a row highlighting bull’s hesitation to control the price action. On Friday, the pair retreated to current trading zone 1.2195 – 1.2364.
Thus, a close below the low end of the zone reflects a possible bearish comeback. This may send GBPUSD towards 1.1958. Further close below that level could encourage bears to press towards 1.1550. Having said that, the daily and weekly support level underscored on the chart (zoomed in) should be watched closely.
On the flip-side, any close above the high end of the zone may cause a rally towards 1.2589. Further close above that level could extend the rally towards 1.2830. Yet, the weekly resistance levels marked on the chart would be worth monitoring.
GBP/USD Four Hour PRICE CHART (Mar 17 – April 7, 2020)
Looking at the four-hour chart, we noticed that uptrend move pushed GBP/USD on March 27 to its highest level in two weeks at 1.2486. Bulls failed twice to overtake this level signaling weaker uptrend momentum. This led the price on Friday to break the uptrend line originated from the March 23 low at 1.1472 generating a bearish signal.
A break below 1.2150 would be considered as an additional bearish signal and increases the likelihood of falling towards 1.1976. Yet, the weekly support level underlined on the chart should be kept in focus. In turn, a break in the other direction i.e. above the aforementioned March 27 high may entice bulls to push GBPUSD towards 1.2559. Although, the weekly resistance level printed on the chart should be considered.
See the chart to find out more about key levels Cable would encounter in a further bearish /bullish scenario.
What is the fundamental side of the story? Read more in: British Pound (GBP) Latest: Firmer After Tumble on News Johnson in Intensive Care
Written By: Mahmoud Alkudsi
Please feel free to contact me on Twitter: @Malkudsi