GBPUSD Weekly Technical Outlook
Three weeks ago, price action slightly disposed bearish after a 78.6 Fib retracement of the swing down from the high of June 2016 to the low of January 2017. This was followed by an indecision candlestick, an inside bar, two weeks ago. Last week saw a major move by bears to push price below the low of the bullish candlestick formed three weeks ago; which they succeeded in doing. Current price action is now located at a horizontal support around the 1.38100 area, which is in confluence with the 61.8 Fib zone. Furthermore, an ascending trendline (chocolate) is still in play as support. The technicals on the weekly time frame are synced for further bearish move. But we may expect price action to struggle around the 1.35890 area, which represents a confluence of horizontal support, a trendline support and a 50 Fib zone. Until then, I see bears making a strong showing.
On the daily time frame, recent price action has been largely bearish and the order flow context is very much in favour of bears. A support trendline (navy) has been broken southward but the ascending trendline (chocolate) seen on the weekly time frame is still in play. The zone between the two trendlines is likely to act as support for a while until the weekly ascending trendline (chocolate) is broken down. Alternatively, price action may swing north and establish a bullish mode, particularly when it reaches the 1.35890 area or bounces off the weekly ascending trendline (chocolate).
On the H4 time frame, price action has retraced northward and is consolidating around the support trendline (navy) seen on the daily time frame. A piercing formation was printed on Friday and was followed up by some sideways operation within the mean area and around the support trendline (navy). This situation suggests the likelihood of a bearish continuation. If bears manage to break down the horizontal support around the 1.38100 area, we may expect them to target the 1.35890 area. However, this does not preclude price action from turning northward around the 1.38100 area.
I may be wrong. Trade safe and prosper.