- On the 4-hour chart, we can see that the price is forming a head-shoulder pattern.
- A break of the 1.2150 structure is required to move on to test trend line support and commitments at 1.2100.
- If the bulls were to commit, the case for a bull cycle top would be in the offing with 1.2450 in the spotlight.
According to the above analysis, GBP/USD bears pick up pace, eye on ruptour of 1.2150, the British pound remains within the uptrend, but is testing commitments below 1.2200 and at 1.2150. The low for the week so far has been 1.2152 and what follows illustrates the prospects for a deeper correction if the bears hold their course.
GBP/USD Previous Analysis
It has been claimed that GBP/USD has potentially started to enter a distribution phase below the 1.2350 and 1.2400 zones on the daily chart, as illustrated above.
However, the sterling uptrend would remain intact while the 1.2150 and 1.1900 structures have yet to be broken:
A move below 1.2150 could, however, trigger a deeper correction via the Fibonacci scale with eyes set on a 50% mean reversal at 1.2120 and then a confluence of the 1.2120 ratio. 61.8% with the upper quarter of the 1.20 zone near 1.2070.
GBP/USD update, H4 chart
On the 4-hour chart, we can see that the price is forming a head-shoulder pattern with lower highs on the right shoulder. This raises prospects for a break of the structure at 1.2155, for a move into testing trend line support and commitments at 1.21 for other sessions ahead.
If the bulls were to commit around dynamic trend line support, then the case for a higher cycle top would be on the cards with 1.2450 in the offing.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
