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The GBP/USD pair testing strong resistance around the area of 1.3396, prepare for a drop.
The GBP/USD pair faced resistance at the level of 1.3445, while minor resistance is seen at 1.3396. Support is found at the levels of 1.3277 and 1.3189.
Price is testing first resistance at 1.3396 (100% Fibonacci retracement, horizontal overlap resistance - double top) and we expect to see a reaction off this level to push price down towards 1.3277 before 1.3189.
It should be noted that a daily pivot point has already set at the level of 1.3277. Equally important, the GBP/USD pair is still moving around the key level at 1.3277, which represents a daily pivot in the H4 time frame at the moment.
The GBP/USD pair continues to move downwards from the areas of 1.3396. Today, resistance is seen at the levels of 1.3396 and 1.3448.
So, we expect the price to set below the strong resistance at the levels of 1.3396 and 1.3448; because the price is in a bearish channel now.
Amid the previous events, the price is still moving between the levels of 1.3396 and 1.3189.
In overall, we still prefer the bearish scenario as long as the price is below the level of 1.3396.
Furthermore, if the GBP/USD pair fails to break the top at 1.3396, the market will decline further to 1.3277 (daily support 1).
In the short term, we expect the GBP/USD pair to continue to trade in a berish trend from the new support level of 1.3277 to form a bearish channel.
Also, it should be noted that major support is seen at 1.3189, while immediate support is found at 1.3277. According to the previous events, the pair is likely to move from 1.3399 towards 1.3277 and 1.3189 as targets.
The price will fall into a bearish trend in order to go further towards the strong support at 1.3189 to test it again. The level of 1.3189 will form a double bottom.
On the other hand, if the price closes above the strong resistance of 1.3399, the best location for a stop loss order is seen above 1.3448.
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