The GBP/USD pair continues to exhibit significant bearish pressure across all timeframes, from short-term to long-term. The downtrend is supported by technical indicators and price structure, reinforcing the bearish momentum. This article provides a technical analysis based on H4, Daily, and Weekly timeframes to help you understand market conditions and trading opportunities.
GBP/USD Analysis on H4
Trend
In the H4 timeframe, GBP/USD is in a clear downtrend. The price remains below the 50 and 100 SMAs, confirming strong seller dominance in the market.
Support and Resistance
- Key Support: 1.2500
- Nearest Resistance: 1.2560
Stoch RSI Indicator
- Overbought/Oversold: The Stoch RSI is in an oversold position (21.59), suggesting a potential minor rebound, but bearish dominance persists.
Read more: Technical Analysis of EUR/USD This Week: Bearish Potential!
GBP/USD Analysis on Daily
Trend
In the Daily timeframe, GBP/USD displays a medium-term bearish trend. The price has crossed below the 50 SMA (1.2849) and continues to move away from it, indicating increasing selling pressure.
Support and Resistance
- Key Support: 1.2450
- Key Resistance: 1.2650
Stoch RSI Indicator
- Overbought/Oversold: The Stoch RSI is at an extreme oversold level (8.15), suggesting a minor price correction may occur before further declines.
GBP/USD Analysis on Weekly
Trend
In the Weekly timeframe, GBP/USD demonstrates a long-term bearish trend. The price has crossed below the 50 SMA and is heading toward the main support level, reinforcing consistent selling pressure.
Support and Resistance
- Key Support: 1.2400
- Key Resistance: 1.2800
Stoch RSI Indicator
- Overbought/Oversold: The Stoch RSI is at an extreme oversold level (0.01), indicating potential consolidation before the price resumes its downward movement.
Read more: Risk Management in Forex Trading
Price Movement Predictions
Short-Term (H4 – Daily)
The price is likely to test resistance levels at 1.2560-1.2650 before continuing its decline toward the support area of 1.2450-1.2400.
Long-Term (Weekly)
GBP/USD is expected to move toward the 1.2400 support level. If this level breaks, the next target will be around 1.2300.
Trading Recommendations
- Position: Sell
- Entry Point: 1.2560 (if the price pulls back)
- Take Profit (TP): 1.2450
- Stop Loss (SL): 1.2650
Reasons:
- Strong bearish trend visible across all timeframes.
- Oversold Stoch RSI indicates potential for minor correction, but no significant reversal signal yet.
- The 1.2560 resistance level offers an ideal risk-reward ratio for entry.
With this in-depth analysis, you can take advantage of GBP/USD trading opportunities this week. Always practice proper risk management and monitor the market regularly to ensure well-informed trading decisions!
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