GBP Technical Outlook
- GBP/USD reversal has pressure on the downside
- Back inside bull channel, lower parallel targeted
GBP/USD reversal sets it up for more selling
The weekly GBP/USD reversal puts the onus on the long-side of the market. Abrupt turnabouts like last week can have some lasting effects if not quickly reversed, and with price inside the channel from September, odds of further losses rise even more.
The weekly reversal (high = 14241) came from around the highest weekly closing print of 2018 (high close = 14236), which turned out to be a significant cycle high. So this isn’t that surprising.
With GBP/USD trading back inside the bull channel (broke the top of it as support), this opens up a path to trade down to the lower parallel of the structure; this clocks in around 13630 or so, a solid distance from here. More importantly, in confluence with the lower parallel is the March trend-line. A big spot down there.
From a tactical approach, the trading bias is to the short side unless we see some type of reversal and stabilization. Keep an eye on risk trends as well, as stocks sag and USD gains a bid.
Recommended by Paul Robinson
Check out the Q1 GBP Forecast
GBP/USD Daily Chart (inside channel)
GBP/USD Weekly Chart (reversal at highest weekly close of 2018)
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—Written by Paul Robinson, Market Analyst
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Originally Posted on: https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2021/02/27/British-Pound-Technical-Outlook-GBPUSD-Signals-More-Losses-Ahead.html
By: Paul Robinson