GBPUSD Technicals Looking Bearish
Testing resistance just above at 1.6000 at 1.5991, the GBPUSD’s prospects for further upside look to be in jeopardy. Although a break above the 1.6000 could spark momentum for movement upward, the key to any bullish push remains dependent on the 1.6038 resistance barrier. As a result, the currency pair could be subjected to a move lower before any higher highs can be made.
Technical oscillators are supportive of the bearish sentiment. Moving average convergence divergence is showing a small bearish divergence in the 15-minute time frame – usually associated with reputable corrections. Stochastic is also slightly above the midpoint, rising towards overbought conditions at a reading of 57.96.
GBPUSD 15-minute timeframe – Source: FXTrek Intellicharts
As a result, with the price action already breaking through the upward rising 1.5680-1.5957 trendline, we anticipate a move lower to test initial support at 1.5957 (October 25th session low). A break lower at that level could spark massive declines in the exchange rate till the psychological support of 1.5900. The figure corresponds with the 38.2% Fibonacci retracement level from the 1.5680-1.6039 rise.
But, if the price action jumps above the 1.6038 barrier, the move will negate the previous scenario as bulls will likely target 1.6133, the May 25th session low.