Technical Market Outlook:

The GBP/USD pair has been seen coming off the extremely overbought market conditions, however bulls were able to make a new local high at the level of 1.2343 in the meantime. Moreover, a Bearish Engulfing candlestick pattern was made at the top of the move on the H4 time frame chart, so the market is ready to make a deeper correction. The nearest technical support is seen at 1.2106, so the bears keep trading close to this level. In a case of a breakout lower, the next target for bears is seen at 1.1897 (30th November low).

Weekly Pivot Points:

WR3 - 1.24283

WR2 - 1.23713

WR1 - 1.23415

Weekly Pivot - 1.23143

WS1 - 1.22845

WS2 - 1.22573

WS3 - 1.22003

Trading Outlook:

The bulls are temporary in control of the market and the 50% Fibonacci retracement of the last big wave down located at 1.2293 had been tested, so a down trend resumption is possible. On the other hand, the level of 1.0351 has not been tested since 1985, so the down trend is strong. In order to terminate the down trend, bulls need to close the weekly candle above the level of 1.2275 (swing high from August 10th).