GBP/USD Trading at the Crossroad

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gbpusd 4h chart 1/30

The GBP/USD has been bearish, but started to be choppy in January, and made a decent pullback after making a new low on the year. Let’s take a look at the charts.


GBP/USD rebounded from 1.4951 to 1.52, a common resistance. Now, earlier in the month, the market was holding below 1.52 except for a clear-out that went to 1.5270. However, the fact that 1.52 held as resistance afterwards suggested bearish continuation and that is what happened when price made a new low.

Price action is choppy again, as GBP/USD returned to 1.52 but retreated and is trading just under 1.51 now, with an intra-session range between 1.5020 and 1.51. After today’s GDP data, if price breaks above 1.51, it should pressure the 1.52 area again, and this could be within the context of a potential inverted head and shoulders pattern.

A break below 1.5020 however exposes the 1.4951 low, with risk of breaking to 1.49. This would be the bearish continuation scenario.

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Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.