The GBP/USD pair has been under bearish pressure in recent days. Based on technical analysis across the H1, H4, and D1 timeframes, the price movement remains dominated by sellers. This article provides a detailed analysis, price predictions, and potential trading strategies.
GBP/USD Daily Analysis (D1)
On the daily timeframe, the GBP/USD pair is in a strong downtrend. The price currently trades below the 9-period SMA, indicating seller dominance over the past few weeks.
Trend
- Main trend: Downtrend.
- The price consistently forms lower highs and lower lows since early November.
Support and resistance
- Key resistance: 1.2800 (near the 9-period SMA area).
- Nearest support: 1.2500 (psychological level).
Technical indicators
- Stochastic RSI is in the oversold zone (9.65), indicating heavy selling pressure with a possibility of a pullback or consolidation.
GBP/USD H4 Analysis
On the H4 timeframe, GBP/USD also shows a bearish trend consistent with the D1 timeframe. However, there are signs of potential consolidation before further declines.
Trend
- Trend: Downtrend.
- The price continues to decline below the 9-period and 21-period SMA, reinforcing the bearish sentiment.
Support and resistance
- Nearest resistance: 1.2560.
- Support: 1.2510 (previous low).
Technical indicators
- Stochastic RSI is in the neutral zone (79.48), suggesting a potential short-term reversal towards resistance before continuing the bearish trend.
GBP/USD H1 Analysis
On the H1 timeframe, the price movement shows stronger bearish momentum with relatively high volume.
Trend
- Trend: Short-term downtrend.
- The price remains below the 9-period SMA, signaling continued bearish momentum.
Support and resistance
- Nearest resistance: 1.2558 (based on the 9-period SMA in H1).
- Support: 1.2520 (previous consolidation area).
Read: How to identify support and resistance
Technical indicators
- Stochastic RSI is in the oversold zone (13.50), signaling a potential minor retracement towards resistance.
GBP/USD Price Prediction
Based on the above analysis, GBP/USD is expected to continue its bearish movement in the short and medium term, with a minor pullback likely towards the nearest resistance. If the price breaks below the 1.2500 support level, the bearish trend will gain further momentum.
- Short-term prediction: A pullback to 1.2560 before continuing downward.
- Long-term prediction: A decline towards the 1.2400 level if selling pressure persists.
Trading Recommendations
Based on technical analysis, the following trading strategy can be applied:
- Entry point: Sell at 1.2550 (near the nearest resistance).
- Take profit (TP): 1.2480 (next strong support level).
- Stop loss (SL): 1.2585 (above the nearest resistance).
Reasoning:
- Both the main trend and technical indicators show seller dominance.
- Support and resistance levels provide attractive risk-to-reward opportunities for entry.
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