Technical Analysis
Chart Timeframe: 2-hour chart
Trend Structure:
The price was in a rising channel, forming higher highs and higher lows.
A breakdown has occurred, violating the ascending trendline (orange line).
The bearish engulfing pattern and aggressive sell-off confirm a shift in momentum.
Key Levels:
Support: 1.2770 – 1.2717 (target zone)
Resistance: 1.2996 (previous swing high)
Trade Setup:
A short (sell) entry was likely taken after price broke the structure and retested the support-turned-resistance zone.
Stop-loss above the retest area (~1.2996)
Take-profit targeting 1.2770 or lower
Indicators & Confirmation:
Trendline Break: Signals a potential reversal.
Support Retest: Price tested and rejected the key level.
Momentum: Strong bearish candles confirm seller strength.
Fundamental Analysis
Recent Events Impacting GBP/USD
UK Inflation & Interest Rates:
The Bank of England (BoE) has been cautious about rate cuts, but inflation is cooling down.
If the BoE signals rate cuts, GBP could weaken, pushing GBP/USD lower.
US Dollar Strength:
The Federal Reserve (Fed) has kept a hawkish tone, supporting the USD.
Stronger US economic data (jobs, inflation) makes the dollar more attractive.
Market Sentiment (Risk-On vs. Risk-Off):
If market sentiment shifts to risk-off, USD strengthens, adding downward pressure to GBP/USD.
Conclusion: Bearish Outlook
Technicals confirm a breakdown, with a short target around 1.2770 – 1.2717.
Fundamentals favor USD strength, supporting a bearish move.
Watch for:
US data releases (GDP, employment)
BoE statements on future interest rates
A potential pullback to the broken trendline before further downside
Chart Timeframe: 2-hour chart
Trend Structure:
The price was in a rising channel, forming higher highs and higher lows.
A breakdown has occurred, violating the ascending trendline (orange line).
The bearish engulfing pattern and aggressive sell-off confirm a shift in momentum.
Key Levels:
Support: 1.2770 – 1.2717 (target zone)
Resistance: 1.2996 (previous swing high)
Trade Setup:
A short (sell) entry was likely taken after price broke the structure and retested the support-turned-resistance zone.
Stop-loss above the retest area (~1.2996)
Take-profit targeting 1.2770 or lower
Indicators & Confirmation:
Trendline Break: Signals a potential reversal.
Support Retest: Price tested and rejected the key level.
Momentum: Strong bearish candles confirm seller strength.
Fundamental Analysis
Recent Events Impacting GBP/USD
UK Inflation & Interest Rates:
The Bank of England (BoE) has been cautious about rate cuts, but inflation is cooling down.
If the BoE signals rate cuts, GBP could weaken, pushing GBP/USD lower.
US Dollar Strength:
The Federal Reserve (Fed) has kept a hawkish tone, supporting the USD.
Stronger US economic data (jobs, inflation) makes the dollar more attractive.
Market Sentiment (Risk-On vs. Risk-Off):
If market sentiment shifts to risk-off, USD strengthens, adding downward pressure to GBP/USD.
Conclusion: Bearish Outlook
Technicals confirm a breakdown, with a short target around 1.2770 – 1.2717.
Fundamentals favor USD strength, supporting a bearish move.
Watch for:
US data releases (GDP, employment)
BoE statements on future interest rates
A potential pullback to the broken trendline before further downside
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.