GBPUSD action around 1.3070, expecting bearish trend
On the weekly timeframe, the price followed a bearish channel that has started around April. The channel was confirmed by a 2nd lower-low point (August) and a 2nd lower-high point (Sept). If the trend is followed, we are now looking to form a new lower low.
On the daily timeframe, we can spot a key support area around 1.269, with a double bottom formation hitting it in August and October. On the other side, we can also spot a key resistance area around 1.3268, where a double top formation has been formed, but later invalidated by a further bullish trend.
Applying the Fibonacci levels between these double tops and bottoms formations, we can spot that the current price level is around the key 61.8% level, also touching the bearish trendline.
If the price continues to follow the trend & the fib levels, we can expect further bullish action up to, potentially, the 71% level (at 1.3223), and then a bearish reversal into 1.3 and potentially lower (down to fib 0% at 1.27, and even -27% at 1.2531).
Something also worth bearing in mind is that a lot of Brexit-related fundamentals are in play now, supporting the level above 1.3. These fundamentals can keep the currency in a consolidation zone for a while, without a clear bullish or bearish trend. Longer term, however, we can maintain the bearish bias.
On the daily timeframe, we can spot a key support area around 1.269, with a double bottom formation hitting it in August and October. On the other side, we can also spot a key resistance area around 1.3268, where a double top formation has been formed, but later invalidated by a further bullish trend.
Applying the Fibonacci levels between these double tops and bottoms formations, we can spot that the current price level is around the key 61.8% level, also touching the bearish trendline.
If the price continues to follow the trend & the fib levels, we can expect further bullish action up to, potentially, the 71% level (at 1.3223), and then a bearish reversal into 1.3 and potentially lower (down to fib 0% at 1.27, and even -27% at 1.2531).
Something also worth bearing in mind is that a lot of Brexit-related fundamentals are in play now, supporting the level above 1.3. These fundamentals can keep the currency in a consolidation zone for a while, without a clear bullish or bearish trend. Longer term, however, we can maintain the bearish bias.