The GBPUSD pair has been quite an interesting pair lately. We have seen the GBP make some substantial gains against the USD in recent weeks.
This pairs price has seemed to reach a resistance zone, which can be seen by the solid red line. This seems to be a strong resistance, its already been tested 4 times over the past couple of days and it hasn't given in yet.
A rising wedge has also seemed to appear within the chart (blue solid lines). This chart pattern is usually an indication that the market would start moving in a bearish direction.
I believe that this pair would once again test the wedge at about 1.37700. This would move it above the previous resistance, but I believe this would just be a fake out. If the price fails to gain enough moment to break this strong resistance, I believe the price would start moving down. Once the price moves to an area around 1.36800, it would be tested by the support. I believe it will break this support and move down towards 1.34500
Everything that I post are just personal ideas, you should not solely rely on this analysis to make money. I do not take any responsibility for any losses made.
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The price seems to have broken out the bottom of the rising wedge it was in earlier this week. Now the price seems to have moved back to the previous support of the wedge, which is not acting as a level of resistance. This new resistance level seems to be holding well and could send the price of this pair further down over the next couple of weeks or so.
Keep a close eye on this pair through the Thursday trading session as the BoE would be making interest rate decisions and a few other financial events would be taking place, including the Markit/CIPS Construction PMI. This could for sure cause some volatility in GBP pairs.
Overall, I believe the pound would be bearish for the next couple of weeks until it moves around 1.34500.
Good analysis mate, I agree, very likely price will move above these highs picking up liquidity and wiping stop losses, faking above then getting a real move back down