GBP/USD Rally Unwinds But Not Likely Over

Key Highlights

  • The British pound surged above 1.3250 before sellers appeared near 1.3350 against the U.S. dollar.
  • A major declining channel is in place with resistance near 1.3240 on the 4-hour chart of GBP/USD.

GBP/USD Technical Analysis

Looking at the 4-hours chart, the pair traded as high as 1.3350 and later started a significant downside correction. It broke the 1.3250 support level and the 38.2% Fibonacci retracement level of the last wave from the 1.2968 low to 1.3350 high.

However, there are many supports on the downside near the 1.3150 level and the 50% Fibonacci retracement level of the last wave from the 1.2968 low to 1.3350 high. Below 1.3150, the pair could decline towards the 1.3090 support (a key pivot area).

At the outset, there is a major declining channel is in place with resistance near 1.3240 on the same chart. A break above the channel resistance and 1.3250 will most likely start a fresh upward move towards the 1.3300 or 1.3350 level.

GBP/USD

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