GBP/USD Technical Outlook Near-term Bearish

GBP/USD Technical Outlook

  • GBP/USD posted weekly reversal at 2018 highs
  • Targeting support below 13700 near-term

GBP/USD to trade lower

Last week, GBP/USD posted a weekly reversal candle at an important long-term level. The high price of the candle was just a few pips above the strongest weekly close of 2018; an important macro high as it subsequently led to the lowest levels in decades.

The key reversal week at long-term resistance is reason enough to look for near-term weakness, but furthering the case is the break back inside the intermediate-term channel dating to September.

Often times when price leaves the confines of a channel it leads to a blow-off (this time to the 2018 high), and when that move is reversed back inside the channel the tendency is for a decline to develop to at least the other side of the channel. The other side of the channel is also in confluence with the March trend-line.

From a tactical standpoint a close back above the channel (~14050 and rising with the channel) would dent a bearish trading bias. On the downside, there is currently about 300 pips of room until the lower parallel of the channel is met around the 13635 level (and rising). This makes a for a decent risk/reward scenario.

GBP Forecast

GBP Forecast

Recommended by Paul Robinson

Check out the Q1 GBP Forecast

GBP/USD Weekly Chart (weekly reversal around 2018 high)

gbp/usd weekly chart

GBP/USD Daily Chart (looking for other side of channel)

gbp/usd daily chart

GBP/USD Charts by TradingView

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—Written by Paul Robinson, Market Analyst

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By Jonathan Prop

Jonathan Prop is an independent financial advisor. He has been working in finance for the last 20 years. After retiring early in his 40s, Jonathan decided to help others get to grip with financial markets, particularly his area of expertise - forex!

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