GBP/USD: Double Top driving the price down
By Eaglefx On May 14, 2020 in Daily Market Analysis
GBP/USD has been bearish on the daily chart since 1st May. The price had a rejection at a double top resistance and breached the neckline. Thus, the sellers are going to keep their eyes on the pair to go short in the daily chart. Major intraday charts such as the H4 and the H1 look good for the bear too. Thus, the pair may produce another bearish candle on the daily chart. If today’s daily candle closes as a bearish marubozu candle, the pair may make a massive bearish move. Let us now have a look at the three major charts.
Chart 1 GBP/USD Daily Chart
The price had a bounce at 1.26150 and produced a bearish inside bar. It headed towards the South and made a breakout at 1.22650. The sellers may consider it a neckline breakout. Thus, they are going to be keen to find out short opportunities in the pair. The chart shows that the price may find its next support around 1.14500. This means the Bear may make a massive move here.
Chart 2 GBP/USD H4 Chart
The H4 chart shows that the price has been heading towards the South upon having upside corrections. Yesterday, the chart produced a massive H4 candle closing within 1.22110. Today’s second H4 candle closed within the level as well. However, as of writing, the pair has been trading below the level. Some sellers may have already triggered their short entries. The price may find its next support around 1.21300.
Chart 3 GBP/USD H1 Chart
The H1 chart has kept making new lower lows. The price had a bounce at 1.22050 and consolidated around the level for a while before making a breakout. Minor intraday traders may wait for the price to go back towards the breakout level and produce a bearish reversal candle to trigger short entries. The price may find its next resistance around 1.21600. On the contrary, if the price breaches 1.22050, intraday buyers may go long and push the price towards the level of 1.22850. Since the daily and the H4 chart are bearish biased, it is more likely that the pair may produce a bearish reversal candle on the minor charts and offer traders short entries.
Considering these three charts, the pair may produce a bearish daily candle. If the candle closes having a tiny lower shadow, the pair may keep heading towards the South with more bearish pressure. The Bear has a lot of space for its next run in the GBPUSD.