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06.02.202309:56 Forex Analysis & Reviews: Technical Analysis of GBP/USD for February 6, 2023

This information is provided to retail and professional clients as part of marketing communication. It does not contain and should not be construed as containing investment advice or investment recommendation or an offer or solicitation to engage in any transaction or strategy in financial instruments. Past performance is not a guarantee or prediction of future performance. Instant Trading EU Ltd. makes no representation and assumes no liability as to the accuracy or completeness of the information provided, or any loss arising from any investment based on analysis, forecast or other information provided by an employee of the Company or otherwise. Full disclaimer is available here.

Technical Market Outlook:

The GBP/USD pair keeps moving lower as the bears broke through the technical support located at the level of 1.2086 and are below 61% Fibonacci retracement level (1.2074). The level of 1.2242 will now act as a technical resistance and the bottom for the corrective wave W. The overall corrective cycle is now evolving onto more complex and time consuming WXY pattern, where waves W and Y are done and wave Y is in progress. The momentum is weak and negative and hit the extremely oversold market conditions, which supports the short-term bearish outlook for GBP. The bounce should be expected soon.

Exchange Rates 06.02.2023 analysis

Weekly Pivot Points:

WR3 - 1.20749

WR2 - 1.20704

WR1 - 1.2068

Weekly Pivot - 1.20659

WS1 - 1.20635

WS2 - 1.20614

WS3 - 1.20569

Trading Outlook:

So far the level of 1.2443 was too strong resistance to break through, so a potential Double Top price pattern might be in play. Moreover, the level of 1.2297 which is 50% Fibonacci retracement level of the last big wave down had been hit, so the bears might resume the down trend. The confirmation of the pattern comes with the level of 1.2089 breakout with a potential target at the level of 1.1840.

Sebastian Seliga
Analytical expert of InstaForex
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