FX.co ★ Jackroay | GBP/USD

I analyze the GBPUSD pair and I notice that I am observing an attempt to build positive sentiment as I watch the price trade near 1.362 while I remain focused on the importance of the 1.364 support zone. I consider a potential long position and I explain that I would only become confident if I see a clean break and consolidation above 1.364 because I believe that buyers must defend this range convincingly. I also track the resistance at 1.368 and 1.389 and I think that only a sustained push through these levels can confirm a shift toward a more durable bullish phase. I rely on the 13-50 moving average and I interpret its upward slope as a technical argument for considering long positions, even though I admit that I remain cautious. I observe that the pound is moving slowly and I feel that constant selling pressure is quietly restraining momentum despite the appearance of upward construction in the wave structure. I monitor the MACD and I acknowledge that it sits in the buy zone while I also warn that it has already slipped below its signal line, which makes me uneasy. I imagine a descending channel and I recall that the last major decline started near the top, which makes me skeptical about chasing this rally. I remember the heavy pressure before the New Year and I remind myself that the subsequent crash broke the channel only after divergence appeared on MACD and CCI, so I believe that history might repeat itself. I review the repeated failures near 1.3427 and I conclude that liquidity was intentionally drained there before price was forced higher in a deceptive way. I reflect on the rebound from 1.3355 and I still believe that the broader decline remains valid because I see confirmation in correlated pairs and in the strengthening potential of the US dollar.

I continue my assessment and I state that I expect a gradual decline toward the 1.3243–1.3181 zone because I believe that this area represents the origin of the last major trend break. I frame the current movement as a second corrective wave and I warn that a stronger third wave down may still be ahead even though I see an inverted head and shoulders on H4. I distrust that pattern and I argue that such obvious structures are often traps designed to accumulate buyers before a deeper selloff. I maintain my bearish bias and I confess that I prefer shorts because I do not believe the rally has strong fundamental support from the UK economy. I recall that price tested the 1.3499 trend break and I expect another retest followed by renewed selling pressure. I set my profit expectations near 1.3000 and I explain that I aim for deeper targets because I anticipate broader dollar strength. I acknowledge the recent low at 1.3399 and I accept that the bounce to 1.3503 created temporary buy signals, but I remain skeptical. I track the Fibonacci targets and I admit that 1.3548, 1.3634, and even 1.3780 are technically valid, yet I doubt that all will be reached sustainably. I note that price broke the daily moving average at 1.3440 and I emphasize that I am waiting to see whether price can truly hold above it. I recognize the higher Fibonacci extensions at 1.3702, 1.3938, and 1.4305 and I concede that the first target is often hit, but I still believe that upside is corrective rather than impulsive. I conclude that I remain positioned mentally for renewed selling because I believe the broader structure still favors a return toward lower levels and I intend to trade accordingly.