Technical Analysis – Could the GBPUSD bears finally deliver a proper sell-off?
August 11, 2023 2:27 pm
GBPUSD is edging high today but it remains under bearish pressure since the July 14 peak of 1.3141. It is currently battling its way through the busy 1.2750-1.2762 area. This is actually the first attempt by the bears to trade decisively below the March 8, 2023 upward sloping trendline.
The current short-term bearish trend is clearly depicted in the momentum indicators. The RSI is edging lower and trying to record a new lower low. Additionally, the Average Directional Movement Index (ADX) has climbed comfortably above its threshold, signaling the presence of a decent bearish trend in the market. More interestingly, the stochastic oscillator is hovering around its 20 threshold and trying to figure out its next move. However, the stochastic’s lower low has not been met by a lower low in GBPUSD, thus potentially opening the door to a bullish divergence.
Should the bears feel ready to record a sizeable pullback, they would have to clear the 1.2750-1.2762 range, which is populated the 61.8% Fibonacci retracement of the June 1, 2021 – September 26, 2022 downtrend and the 50-day SMA at 1.2577, and then break below the 100-day SMA at 1.2606. The path then looks clear until the 1.2287-1.2352 area.
On the flip side, the bulls may decide to defend both the busy 1.2750-1.2762 range and the March 8, 2023 trendline. Should they succeed, they could have another go at recording a new 2023 high by trading above the December 8, 2022 low at 1.3160.
To conclude, GBPUSD bears are desperately pushing for a continuation of the current downleg, but they need to clear some key support levels to declare victory.
GBPUSD is edging high today but it remains under bearish pressure since the July 14 peak of 1.3141. It is currently battling its way through the busy 1.2750-1.2762 area. This is actually the first attempt by the bears to trade decisively below the March 8, 2023 upward sloping trendline.
The current short-term bearish trend is clearly depicted in the momentum indicators. The RSI is edging lower and trying to record a new lower low. Additionally, the Average Directional Movement Index (ADX) has climbed comfortably above its threshold, signaling the presence of a decent bearish trend in the market. More interestingly, the stochastic oscillator is hovering around its 20 threshold and trying to figure out its next move. However, the stochastic’s lower low has not been met by a lower low in GBPUSD, thus potentially opening the door to a bullish divergence.
Should the bears feel ready to record a sizeable pullback, they would have to clear the 1.2750-1.2762 range, which is populated the 61.8% Fibonacci retracement of the June 1, 2021 – September 26, 2022 downtrend and the 50-day SMA at 1.2577, and then break below the 100-day SMA at 1.2606. The path then looks clear until the 1.2287-1.2352 area.
On the flip side, the bulls may decide to defend both the busy 1.2750-1.2762 range and the March 8, 2023 trendline. Should they succeed, they could have another go at recording a new 2023 high by trading above the December 8, 2022 low at 1.3160.
To conclude, GBPUSD bears are desperately pushing for a continuation of the current downleg, but they need to clear some key support levels to declare victory.
Related Posts: