FX.co ★ Farhan Ali Shakir | GBP/USD

At the start of the Asian trading session, the market experienced a slight gap which has since been filled. Sellers in the Asian session are exerting downward pressure on the price, although it’s important to note that it’s still early in the day and circumstances may change. As mentioned, I entertain the possibility of the price moving towards the nearest support level, marked at 1.20371. In proximity to this support level, two scenarios may unfold. The first scenario envisions price consolidation below this level, leading to a further southward trajectory. In this scenario, I expect the price to head towards the support level at 1.18410. Should the price establish below this support level, I expect a continuation of the southward movement, down to the support level at 1.16454. Around this support level, I’ll be on the lookout for a trading setup, aiding in determining the future direction of trading. Naturally, as the price approaches the projected far southern target, intermittent northern pullbacks may manifest, providing opportunities to seek bearish signals from nearby resistance levels. An alternate scenario upon nearing the support level of 1.20371 involves a potential reversal of candle formation and a subsequent upward surge. If this scenario unfolds, I’ll be expecting a price return to the resistance level at 1.23374. Around this resistance level, I’ll persist in searching for indications of a potential southward reversal, in anticipation of a resumption of the downward movement, in line with a broader horizontal pattern. In summary, for today, I’m inclined to consider the possibility of continued southward movement, reaching the nearest support level. From there, my trading decisions will be guided by prevailing market conditions.

As the Asian session began, the GBP/USD faced downward pressure, trading in a direction. It hasn’t yet breached the support level at 1.2104, showing resilience and testing the resistance at 1.2120. If this resistance falters, the prevailing M5 downtrend could shift to an upward trajectory, leading to a test of resistance at 1.2170. A reversal could occur, generating downward momentum to retest the day’s low at 1.2104 and extending to the October low at 1.2035. Should the price break through the resistance at 1.2170 and establish itself above, we may witness an ascent towards last week’s high at 1.2283. This would signify a shift above the downward trend line, showing a medium-term upward trend. The price may continue to climb towards 1.2335 and beyond.