05.10.202208:52 Forex Analysis & Reviews: Technical Analysis of GBP/USD for October 5, 2022

Technical Market Outlook:

The GBP/USD pair has bounced over 11.11% from the lowest level since 1985 located at 1.0352 and is currently extending the rally towards the Fibonacci projection level for wave 5 seen at 1.1560. The Cable trades above the key long-term and short-term technical resistance located at 1.1410. Despite the recent strong bounce, only a clear and sustained breakout above this level would change the outlook to bullish. Please notice, the level of 1.1410 is the first target for the wave 5 as well, so a corrective cycle might occur after this level is hit (the other target for the wave 5 is seen at 1.1560 based on Fibonacci extensions). On the other hand, the next target for bears is located at the parity level of 1.0000, so please keep an eye on this level. The intraday technical support is seen at the level of 1.1410 and 1.1341. The momentum remains strong and positive, but the market conditions are extremely overbought on the H4 time frame chart.

Weekly Pivot Points:

WR3 - 1.15812

WR2 - 1.13861

WR1 - 1.12966

Weekly Pivot - 1.1191

WS1 - 1.11015

WS2 - 1.09959

WS3 - 1.08008

Trading Outlook:

The bears are still in charge of Cable market and the next target for them is the parity level. The level of 1.0351 has not been seen since 1985, so the down trend is strong, however, the market is extremely oversold on longer time frames already. On the other hand, in order to terminate the down trend, bulls need to break above the level of 1.2275 (swing high from August 10th).