The British Pound has been inside of a range for a rather long time, this week it finally broke out. The technical posture of GBP/USD shows that the pair is weakening as the dollar is gaining momentum, with the price currently retesting the key demand zone around the 1.26400 level. This previous support area has capped previous rallies and a decisive break below is signaling a shift in market sentiment.
The price was oscillating within a range, it recently broke below the major support, suggesting an upcoming bearish bias in the medium term. The lower boundary of the range is marked by a demand zone around 1.26400, which has historically served as a springboard for price. As the price broke that level it continued down and found support around 1.2540, as the price made it correction it is now retesting the previous support area. a confirmation of that zone is strong bearish sign and show that the bears are taking over control.
The BoE's confirmed that it will cut rates soon which is a bearish sign for the pound, weakening it further. That coupled with a strengthening dollar promotes a bearish GBPUSD. However, with significant data releases on the horizon, such as the UK CPI coming next week, volatility is expected to spike.
The technical setup suggests a bearish approach, with a close eye on the 1.2640 zone for potential breakout trades or the reassertion of the bearish trendline for reversal opportunities. We have a short position on this pair and are looking for opportunities for more short positions. Unless we see some big unexpected economic data, the price should move below the 1.264 level and as long as we do, we will be looking for shorts.
The price was oscillating within a range, it recently broke below the major support, suggesting an upcoming bearish bias in the medium term. The lower boundary of the range is marked by a demand zone around 1.26400, which has historically served as a springboard for price. As the price broke that level it continued down and found support around 1.2540, as the price made it correction it is now retesting the previous support area. a confirmation of that zone is strong bearish sign and show that the bears are taking over control.
The BoE's confirmed that it will cut rates soon which is a bearish sign for the pound, weakening it further. That coupled with a strengthening dollar promotes a bearish GBPUSD. However, with significant data releases on the horizon, such as the UK CPI coming next week, volatility is expected to spike.
The technical setup suggests a bearish approach, with a close eye on the 1.2640 zone for potential breakout trades or the reassertion of the bearish trendline for reversal opportunities. We have a short position on this pair and are looking for opportunities for more short positions. Unless we see some big unexpected economic data, the price should move below the 1.264 level and as long as we do, we will be looking for shorts.