• The pair: GBP/USD
• Time Frame: H1
• Pivot point: 1.2217

Overview:

• The GBP/USD pair dropped sharply from the level of 1.2217 towards the 1.2081 price during the last two days.
• Today, the first resistance level is seen at 1.2217 (pivot) followed by 1.2303, while daily support 1 is found at 1.2081 and the level of 1.1994 will represent the second support at H1.
• According to the previous events, we expect the GBP/USD pair to trade between 1.2217 and 1.1994.
• The GBP/USD pair is continuing to trade in a bearish trend from the new support level of 1.2217; to form a bearish channel.
• Therefore, the market is likely to show signs of a bearish trend around the spot of 1.2217.
• It should be noted that volatility is very high for that the GBP/USD pair is still moving below the major level of 1.2217 in coming hours.
• Since the trend is below the 38.2% Fibonacci level (1.2248), the market is still in a downtrend. Overall, we still prefer the bearish scenario.

Trading recommandations:

• The market is indicating a bearish opportunity below 1.2217 so it will be good to sell at 1.2217 with the first target of 1.2081. It will also call for a downtrend in order to continue towards 1.1994. However, stop loss is to be placed above the level of 1.2248.

Comments:

• The pair seemed to constitute towards the formation of a dropping wedge - bearish reversal pattern on the 1-hourly chart. This along with another descending trend-line, acting as a resisatance around the spot of 1.2248 and 1.2217.
• The RSI is still calling for a strong bearish market as well as the current price is also below the moving average 100 (blue trend).