Technical analysis of GBP/USD for January 22, 2019:
The bulls defend the support, but for how long?
Technical market overview:
The price of GBP/USD went down towards the technical support zone located between the levels of 1.2814 - 1.2832 and bounced from this zone. The bounce has hit the 50% Fibonacci retracement at the level of 1.2914 (just below the technical resistance at the level of 1.2928) and the market seems to be reversing now. Any other violation of the level of 1.2814 might lead to further sell-off towards the technical support seen at the level of 1.2705 as the price will fall out of the channel lower boundary line. This situation would only accelerate the sell-off as the bulls would have stopped defending the support at 1.1214.
Please notice the market is just coming off from oversold levels and the momentum is neutral to bearish, so both of the indicators support the short-term bearish outlook.
Trading recommendations:
The support zone of 1.2814 - 1.2832 is the key support zone for the bulls, so they will defend it as any sustained violation of this zone will lead to accelerated sell-off. Traders should keep an eye on this zone to see who will win this battle and join the winning side.
