GBP/USD 4-Hour Timeframe AnalysisGBP/USD 4-Hour Timeframe Analysis
The GBP/USD pair has been showing a bullish uptrend, influenced by several key factors. We have identified 1.30200 as a minor key resistance level and 1.28600 as a major key support level, both of which are critical in shaping the price action.
Additionally, we have observed a large consolidation phase, indicating that the buying momentum is starting to wane. The price recently broke through the minor resistance level, creating a false breakout that likely triggered pending buy orders from retail traders. This false breakout could potentially lead to a reversal, as the buying pressure diminishes, suggesting a possible shift towards a bearish movement.
More recently, the price broke below the major support at 1.28600, triggering sell positions among retail traders. However, the price did not continue towards the next minor support level, which indicates that market makers may be attempting a liquidity hunt. As a result, the price is now within a liquidity zone, and we expect the potential liquidation of sellers who have placed their stop-loss orders within this zone.
The recent breakout at 1.28600 has resulted in a Change of Character (CHOCH), signaling a shift in market structure from a bullish trend to a potential bearish phase. This change in character could mark the beginning of a longer-term bearish trend.
However, if the price continues to break above the 1.30200 resistance, a continuation of the bullish trend may occur, and we would need to reassess the market conditions.
Trade Plan: Our strategy is to wait for a clear liquidity buildup before the price retests and potentially breaks the major support level again. We plan to enter a Sell Stop order at 1.28680, with a Stop Loss at 1.29430 (just above the liquidity zone) and a Take Profit target at 1.26820, the next significant support level.
Recent Negative Developments Impacting GBP:
April 4, 2025: The British Pound experienced significant declines against major currencies amid a broader market selloff, largely fueled by escalating trade tensions between China and the United States. This has increased market volatility, prompting a flight to safer assets. (Source: Reuters)
April 2, 2025: U.S. President Donald Trump’s announcement of a global tariff strategy, including a baseline 10% levy on all imports, has further strained the British Pound. Although the UK was spared the steepest tariffs, the 10% levy still impacts approximately £60 billion of annual exports to the U.S., raising concerns about potential economic repercussions for the UK.
These negative developments have added downward pressure on the British Pound, reinforcing the bearish outlook for GBP/USD.
📌 Disclaimer:
This analysis is for informational and educational purposes only and should not be considered financial advice. Trading involves substantial risk, and past performance is not indicative of future results. Always conduct your own research and consult with a financial professional before making any investment decisions.
