Fan Yang
All posts from Fan Yang
Fan Yang in Fan Yang,

GBP/USD - Price Action Suggests Further Bearish Correction

Since retreating from 1.5928, cable has been forming a falling channel seen in the 4H chart. Relative to the prevailing uptrend in June, this falling channel, might be viewed as a flag pattern. This scenario means that the bearish correction is short-term, and that the mode int he medium-term is still bullish. 

GBP/USD 4H Chart 7/3
(Click to enlarge)

The falling price stalled above 1.5655 for a few sessions but a break below the support this week indicated that the bulls have lost control. As we close out the week, price is again in a bit of consolidation, but the latest bearish 4H candle is strong and threatening to continue the correction. 

There is likely going to be some near-term support around 1.5550, where the 200-period SMA resides. However, if a subsequent pullback fails to climb back above 1.56, we should anticipate further bearish correction with the 1.54-1.5440 support/resistance area in sight.