FX.co ★ Khurram78 | GBP/USD

The current GBP/USD price structure gives the impression that the strong bullish momentum seen earlier is beginning to fade. The rejection around 1.33480 not only highlights buyers’ inability to break a key resistance level, but also reinforces the view that the market is searching for a reason to halt further upside movement. On the daily chart, candlestick formations showing long upper wicks in this region often serve as an early indication that selling pressure is starting to emerge, even if it has not yet taken full control. Minor fundamental factors—such as uncertainty surrounding the future direction of interest rates from both the Federal Reserve and the Bank of England—may have contributed to this slowdown, but the price action itself appears far more telling. From a price action standpoint, the formation of lower intraday highs near the rejection zone suggests a gradual increase in selling interest. The tightening candlestick range following the failed breakout shows that buyers are losing the strength and aggression previously seen. The 1.33480 level is significant, having acted as a turning point on several occasions in the past. When plotted on the H4 chart, the supply zone in this region appears as a well-defined distribution block, helping explain the swift price rejection. Meanwhile, the 22-day moving average (MA22) has begun to flatten, a classic indication that bullish momentum is weakening. A decisive move away from the MA22, accompanied by solid bearish candles, often signals the start of a deeper pullback. The RSI offers a similar message; while not yet oversold, it has formed a mild divergence, with the price printing a higher high that the indicator fails to confirm. This scenario frequently marks the beginning of a short-term sentiment shift.

Looking at the nearest demand zone, the region around 1.31900 stands out as a strong candidate for a corrective move. This level previously acted as the base for the last breakout and sits close to a daily structural equilibrium area where buyers last accumulated liquidity. A controlled decline into this zone—without sharp volatility—would typically indicate a healthy correction, giving the market space to establish its next direction. If price meets the MA22 near this area, a retest becomes likely, potentially determining whether the broader trend remains intact. Ideally, buyers hoping to sustain the upward structure would reappear here. However, a daily close below 1.31900 would significantly alter the outlook, breaking the higher-low structure on the daily timeframe and opening the door for a potential sequence of lower lows.