Technical analysis of GBP/USD for October 31, 2016

Overview:

• The GBP/USD pair:
• The market opened below the weekly resistance of 1.2314 (horizontal red line). It continued to move downwards from the level of 1.2300 to the bottom around the spot of 1.2206 - 1.2240. This week, the first resistance level is seen at 1.2314 followed by 1.2403, while daily support 1 is seen at 1.2206. The GBP/USD pair broke support which turned to strong resistance at 1.2314 since last two weeks. Right now, the pair is trading below this level. It is likely to trade in a lower range as long as it remains below the support (1.2314) which is expected to act as major resistance in coming days. This would suggest a bearish market because the moving average (100) is still in a negative area and does not show any signs of a trend reversal at the moment. Amid the previous events, the GBP/USD pair is still moving between the levels of 1.2314 and 1.2119.

Therefore, the major resistance can be found at 1.2314 providing a clear signal to sell with a target seen at 1.2200. If the trend breaks the minor support at 1.2200, the pair will move downwards continuing the bearish trend development to the level of 1.2119 in order to test the daily support 2 in coming days. Overall, we still prefer the bearish scenario which suggests that the pair will stay below the zone of 1.2314 this week.The material has been provided by InstaForex Company - www.instaforex.com