GBP/USD Analysis. The GBP/USD pair has been moving within a clear downtrend since the beginning of May, recording significant losses after breaking key support levels, amidst the strengthening US dollar. The technical structure suggests the possibility of further declines, especially with the pair’s failure to stabilize above 1.3220 during the latest upward rebound.
GBP/USD Analysis : Technical Overview
The structural analysis on the hourly (H1) chart shows that the overall trend remains bearish, despite some limited corrections. Price action is stabilizing below the downtrend line, reinforcing the possibility of a continued decline.
Technical Indicators Analysis:
MACD: Remains in negative territory with a clear weakening in upward momentum.
Stochastic Oscillator: Remains in the overbought zone and may signal an imminent bearish reversal.
Moving Averages: The price is below the 20, 50, and 100-day moving averages, maintaining selling pressure.
GBP/USD Analysis : Expected Scenarios
Bullish Scenario:
If the pair manages to hold above the current support at 1.3208, it may witness a limited technical rebound targeting the resistance at 1.3221, with a potential move towards 1.3257 if breached.
However, this scenario is contingent upon a clear close at 1.3221.
Bearish Scenario:
If the price fails to surpass 1.3221 and stabilizes below 1.3200, the downward wave is expected to resume towards 1.3189, followed by 1.3159 as a key short-term target.
Explanation of Key Areas on the Chart
- 1.3221: A strong resistance area where the price rebound coincided with a break of the moving average line. A break of this area would reinforce the correction.
- 1.3189: Critical technical support. A break of this area would signal the resumption of the downtrend.
- 1.3159: The next technical target if the pressure continues.
Trading strategies based on Buy/Sell levels
| In case of buying | in case of selling | GBPUSD |
| 1.32212 | 1.32028 | Entry point |
| First resistance: 1.32510 | First support: 1.31809 | Target Point 1 (TP1) |
| Second resistance 1.32810 | Second support 1.31509 | Target Point 2 (TP2) |
| 1.32028 | 1.32212 | Stop Loss (SL) |
The British pound is moving under increasing downward pressure, supported by negative technical momentum and a failure to recapture broken support levels. All indicators favor a continuation of the downtrend unless the pivotal resistance at 1.3221 is broken. Traders are advised to monitor upcoming economic data to make informed trading decisions, especially with the increasing economic tensions in the global landscape. Economic Data Impacting GBP/USD This Week
- Bank of England Governor Bailey’s speech – May 14
- UK GDP – May 15
- US Producer Price Index (PPI) – May 14
These data will move the pair strongly, especially if they surprise against expectations.
