Weekly Analysis – GBP
Indeed the GBP weakened against the major currency as per our analysis last week (READ HERE).
The GBPUSD got resisted by the 200-day moving average at very strong the sell zone. Price reacted at these levels and dropped from there. Expecting the pair to continue to weaken as the UK is seen to be feeling the full brunt of the Covid-19 slowdown. The UK GDP fell by 20.4% in April, a monthly record drop.
The UK is far from the being the only country affected by the pandemic. We would like to caution any blind optimism of an economic recovery.
GBPUSD D1 Chart – Review of last week’s analysis
Price reacted as expected and fell. In this coming trading week, we would be expecting a continuation move to the downside but will not rule out another surge towards the sell zone one more time before a larger drop for the GBPUSD
GBPUSD H4 Chart – Continuation of the Bearish Move
The bears entered into the market towards the last 2 trading days, pushing the GBPUSD down 3 big figures towards 1.25 levels. Looking forward to the next trading week, there are potentially 2 scenarios of the bearish continuation:
(i) A minor retracement to the immediate resistance around 1.2650
(ii) A test of the highs again, completing a Bearish Shark at the Sell Zone
Traders should also pay attention to the price reaction to the middle and upper band of the Bollinger Band. Will be monitoring this pair to trade this bearish move.
GBPJPY H4 Chart
Spotted a Bearish Gartley Pattern on GBPJPY with a Sell Zone above it to help ‘protect’ the short trade. Placing stops above the Sell Zone will be ideal for this trade setup.
GBPCHF H4 Chart
Also spotted a potential trade setup on the GBPCHF H1 chart. A Bearish Bat pattern forming in a clearly bearish move. Trades should look at going short at a retracement.
Good luck everyone. Trade right and the profits will come rolling in.
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