Bearish divergence between RSI (14) and price should have GBP/USD traders alert to the risk of a potential partial reversal of the recent bullish move.
Those contemplating the setup could look to sell around current levels or slightly higher, with a stop placed above the recent high of 1.3207 for protection. Bids may emerge around 1.3140—the high set last Friday—although 1.3045 screens as a more appropriate target, given the amount of price action seen either side of it over extended periods last year. While RSI (14) has diverged from price, MACD continues to generate a bullish momentum signal.
If the rally extends beyond 1.3207, the bearish setup would be invalidated.
Even though price and momentum signals favour upside, signs of stability in U.S. Treasuries and stocks—two markets that likely contributed to last week’s U.S. dollar weakness—may support the greenback in the near term.
Good luck!
DS
Those contemplating the setup could look to sell around current levels or slightly higher, with a stop placed above the recent high of 1.3207 for protection. Bids may emerge around 1.3140—the high set last Friday—although 1.3045 screens as a more appropriate target, given the amount of price action seen either side of it over extended periods last year. While RSI (14) has diverged from price, MACD continues to generate a bullish momentum signal.
If the rally extends beyond 1.3207, the bearish setup would be invalidated.
Even though price and momentum signals favour upside, signs of stability in U.S. Treasuries and stocks—two markets that likely contributed to last week’s U.S. dollar weakness—may support the greenback in the near term.
Good luck!
DS
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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.