The GBPUSD pair closed at $1.29161, trading below several key moving averages, which signals a bearish sentiment. As reflected on the chart, the pair has been facing downward pressure and remains under the influence of the moving average crossovers, suggesting continued weakness in the short term. Furthermore, the MACD indicator, a popular tool for spotting momentum shifts, is showing a bearish divergence, reinforcing the negative outlook.
Given the current market conditions, a selling opportunity may arise in the Asian session, which typically starts early in the trading week. Traders can consider initiating a short position if the pair experiences a decline to the $1.29042 level. This price point offers an entry opportunity, with a potential target around $1.28879, which is the next significant support zone that could potentially halt the decline.
GBPUSD Technical Analysis: Trading Strategy
To manage risk effectively, it is crucial to set a stop-loss order to limit potential losses if the market moves against the position. A logical stop-loss level would be around $1.29337, as it lies above recent price action and would signify a failure of the bearish trend if surpassed. By choosing this level for the stop-loss, traders can protect themselves from unexpected market reversals, while also positioning themselves to capture potential profits from the anticipated downward movement.
In summary, the technical indicators support a bearish outlook for GBPUSD. The strategy for the Asian session involves selling at $1.29042, targeting $1.28879, and placing a stop-loss at $1.29337 to ensure effective risk management. This approach aligns with the current market sentiment, which favors continued weakness in the pair.
GBPUSD Technical Analysis: On the Other Hand
On the other hand, if the $1.29337 buy zone is broken, the GBP/USD price may head towards $1.29448.
GBPUSD Technical Analysis: Resistance and Support Levels
- Second Resistance: 1.29274
- First Resistance: 1.29222
- Pivot Level: 1.29155
- First Support: 1.29101
- Second Support: 1.29033
