Bears moving in for test of weekly support
GBP/USD bearish outlook in the process of being confirmed on the daily chart.
The bears will be seeking a break of 1.3200 and 1.3100 in the weekly support structure.
GBP/USD is still reeling from Friday’s sharp drop and tests the bull’s commitments are a critical area of support on the weekly chart.
The following is a top-down analysis that arrives at a bearish bias on a break below 1.32 the figure which opens the significant risk of plenty of downside to come in the final stages o the year and start of the new year.
GBP/USD weekly chart
As illustrated, below 1.3200 and 1.3100, there is an imbalance in price towards 1.2850 where the market could fall into should the support structure give out.
GBP/USD daily chart
Should the bearish engulfing candle be followed by a confirming subsequent bearish candle, or two, then the bias will most certainly mount into the bear’s hands for the following days ahead.