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GBP/USD is trading at 1.1645 level above 1.1463 today's opening price and it could climb higher if the Bullish Engulfing pattern will be confirmed tomorrow by a bullish candle. The pair has dropped from 1.3091 to 1.1423 in only eight days. Now it seems too oversold to continue the bearish movement.
Technically, a potential rebound is somehow natural after the massive drop, even if the bearish pressure is high. GBP/USD rallied today as the USDX dropped. However, you should be careful because the US dollar Index remains bullish and a further increase could force the pair to drop deeper. The pound sterling suffered big losses after the BoE measures to fight and combat COVID-19 took the toll.
GBP/USD has plunged after the failure to reach and retest the upper median line (UML) of the descending pitchfork, the price has registered only a false breakout above the inside sliding line (sl). I've said that the pair could register a larger corrective phase after it has closed the gap up from March 9, the aggressive breakdown below the second sliding line (sl1) has confirmed the bearish momentum.
The price almost reached the next downside target at the lower median line (LML) of the descending pitchfork. A failure to reach this potential target signals a potential bullish momentum even towards the median line (ML) of the descending pitchfork.
We'll see what will happen because the price could drop anytime, but if the bullish engulfing is confirmed and if the price stays away from the LML, GBP/USD could climb higher. The upside targets are seen at the 50% Fibonacci line, 1.2014 level and at the median line (ML).
GBP/USD remains under pressure despite today's rally. It could increase in the short term if the Bullish Engulfing pattern is confirmed tomorrow and if the price fails to reach the lower median line (LML) of the descending pitchfork.
The 50% Fibonacci line is seen as a first upside target, a valid breakout above it will send the price at least till the 1.2014 static resistance (support has turned into resistance). A further drop could be confirmed when the price breaks below the LML, when we'll have another low.
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