GBP/USD Technical analysis:
the Pound sterling ended Wednesday higher against the US dollar as traders dumped safe havens in favor of risk. Daily support has been the focus (technical) this week at $1.3355 with neither side of the market committing yet. Territory below current support has daily support from Quasimodo at $1.3119 to target.
Recent technical writing also had the following to note (in italics):
Daily support at $1.3119 is tied to the weekly timeframe ($1.4241) double top pattern profit target at $1.3090. In terms of momentum, the Relative Strength Index (RSI) on the daily chart shows that the value continues to operate south of its 50.00 midline, advising traders that average losses exceed average gains.
And regarding the trend, we remain unchanged in our outlook (in italics):
The direction of the longer term trend has been south since the end of 2007 at $2.1161. As a result, the passage of the March 2020 pandemic lows could be seen as a pullback in the broader downtrend. This, of course, places a question mark over the 7.5% “correction” from February 2021 to December 2021; this may actually be the start of a longer term push down and not a buy down scenario.
Regarding the H4 timeframe, the unit established another low ahead of the AB=CD formation at $1.3263 on Wednesday, emphasizing a possible double bottom setup ($1.3272). If the H4 price clears the resistance of the Quasimodo support at $1.3436, it would not only “confirm” the double dip pattern, but it would open the way to test the H4 resistance at $1.3498.
Turning to the H1 time frame, early London saw the price momentarily drop below $1.33 and the test space just north of the H1 Quasimodo resistance turned into support at $1.3271. As we head towards the close of trade on Wednesday, the currency pair is at a touching distance of $1.34. The break above here highlights two areas of resistance at $1.3443-1.3459 (placed just above H4 resistance at $1.3436) and $1.3477-1.3514 (home to H4 resistance at $1.3498).
Given that the price is maintaining daily support at $1.3355, there is a possibility of taking $1.34 with an upward follow-up to hit the H1 resistances at $1.3443-1.3459 and 1.3477-1. .3514$.
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