GBP/USD had an inconclusive end to last week. Daily price action looked indecisive as the pair came under intense selling pressure in the 1.3560 to 1.3640 zone. GBP/USD opened the week at 1.35340, then early on edged to a low of 1.34906, then floundered, with the pair eventually hitting a high of 1.3647, before strong selling led it to close at 1.35992.
Despite GBP/USD managing a gain of 0.19% last week, the weekly candlestick formation wasn’t the thick body that would give confidence of any big range breakout this week. Bigger picture, the 1.3745 and 1.33529 levels, the latest swing high and lows on the weekly chart, still look like significant hurdles to break.
In terms of the daily setup, the market structure still points to continuing the downtrend that has gripped the market since September last year. Price is confined between the Dec. 8 swing low of 1.31610 and a high of 1.37489. Furthermore, after breaking above the 1.35740 - 61.8% Fib level of the last impulse and corrective move – the pair failed to sustain on the retest and continues to bump up against the 200-EMA.
More recently, the pair has been trading in a range between 1.3612 and 1.34902. But a break higher above 1.37489 is needed to confirm any chance of a real shift in trend. While a fall back closer to 1.3433-1.34161 would put the price back into a sell zone and give greater confidence of a resumption of the downward trend.
