GBPUSD Weekly Technical Outlook
On the weekly time frame, GBPUSD printed rejection candlesticks at an S/R zone that was last crossed northward in November 2017. This zone, 1.30800/1.33180, is also in confluence with the 50 Fib retracement zone of the northward move since January 2017. Besides, the lower tail of the pinbar formed last week pierced an ascending trendline (black) from the low of January 2017 and bounced off it. Very much likely we may see bulls take the market further northward this week. An initial target area is the 1.34440 area; which is in confluence with the 38.2 Fib retracement of the northward move since January 2017. The 1.36180 area, a major resistance zone (purple), may be attractive for a bullish follow through. However, that is still very much beyond the reach of bulls at the moment.
The rejection candlestick formed around a support zone last week Thursday was followed up by a bullish drive on Friday. The candlestick printed on Friday covered more than 150 pips and took price action to the next minor resistance around the 1.32260 area. It will not be a surprise if bulls take control of price action this week to drive the market to the 1.34230 area, the origin of a recent major downward move on the daily time frame. It is significant to note that a descending trendline (blue) from the high of May 17, 2018 has been breached northward last Friday. However, as the candlestick formed on a Friday, we may have to wait till Monday this week for a bullish confirmation on a daily closing basis. I normally don’t trade on Monday, so I will wait for clarity of price action.
On the H4 time frame, the GBPUSD market is disposed northward. A minor ascending trendline (magenta) is emerging. A successful testing of the trendline by price action is likely to give me confidence for a bullish bias. This is more so as a descending trendline (red) from the high of April 17, 2018 is in play as resistance and the the most recent price action stopped around it. Besides, there is a minor horizontal resistance, around 1.32260, acting as a confluence. So, we may see a southward retracement first.
I may be wrong. Trade safe and prosper.