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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