Technical Market Overview:
After reaching the new swing high at the level of 1.2526, the GBP/USD bulls have started to consolidate their positions in a narrow range and the trneline test has begun. It is clear, that the move-up might have been completed as there is a Shooting Star candlestick formation present at the end of the rally. Please keep an eye on how this key level will be played by the market participants, because of the overbought conditions. The momentum remains strong and positive, so the bulls can still make pressure on higher price levels. Nevertheless, there is a clear and visible negative divergence between the price and momentum indicator, so the correction might occur any time soon. The nearest technical support is seen at the level of 1.2381.
Weekly Pivot Points:
WR3 - 1.2885
WR2 - 1.268
WR1 - 1.2601
Weekly Pivot - 1.2422
WS1 - 1.2331
WS2 - 1.2133
WS3 - 1.2067
Trading Recommendations:
The best strategy for current market conditions is to trade with the larger timeframe trend, which is down. All upward moves will be treated as local corrections in the downtrend. In order to reverse the trend from down to up, the key level for bulls is seen at 1.2505 and it must be clearly violated. As long as the price is trading below this level, the downtrend continues towards the level of 1.2000 and below.
