The GBP/USD is near important long-term support which has been tested on occasion the previous two months.
As of this writing, the GBP/USD is hovering slightly below the 1.36700 and is fully within sight of longterm lows, which have been tested in the middle of August and July on two separate occasions. Global market sentiment remains fragile as financial institutions are faced with interpreting the latest FOMC Statement from the US Federal Reserve, economic data also from the US which is being argued, and financial concerns in China regarding its real estate market.
The GBP/USD was trading near a high of almost 1.39200 on the 14th of September, but has developed an incremental slump which has brushed aside support ratios. Yesterday’s trading within the GBP/USD saw a massive amount of transactional volumes occur when the Forex pair came within sight of the 1.36090 level, but the ensuing reversal higher has progressed and achieved the current values now being displayed near the 1.36680 level.
Technically, if the GBP/USD can withstand the bearish sentiment which has created the downward action in the Forex pair near the support ratio of 1.36630 and sustain values above, this may be enough for speculative bulls to try and wager on upside momentum. The last time the GBP/USD traded below the 1.36000 level with any amount of sincere time duration was in January of 2021 and this occurred while the Forex pair was incrementally climbing higher. A high of nearly 1.42300 was encountered on the 24th of February, which was also tested during May and early June of this year.
Speculators who believe the GBP/USD has been oversold cannot be blamed, taking into account the historically strong range the British pound has frequently sustained against the USD. However, the trend sometimes has a habit of proving it is stronger than support ratios, and if the GBP/USD should falter and a test of the 1.36600 to 1.36500 levels is facilitated, speculators may be proven wise to aim for take profits which challenge lows seen yesterday.
Traders who decide to pursue further bearish momentum are cautioned not to be overly ambitious and use a conservative amount of leverage while seeking lower values with quick hitting goals. The recent downward trend of the GBP/USD is attractive, but it could also prove dangerous if and when a sustained reversal is born. Until then, selling the GBP/USD on slight reversals higher which come within sight of current resistance may be a worthwhile selling wager.
GBP/USD Short-Term Outlook
Current Resistance: 1.367400
Current Support: 1.36550
High Target: 1.37000
Low Target: 1.35895