Technical market overview:
After a recent 500 pips rally to the level of 1.2705, the GBP/USD market is now in the corrective pull-back cycle and the bears are testing the level of technical resistance at 1.2649 in the overbought market conditions. Nevertheless, the immediate technical support is seen at the level of 1.2580 - 1.2561 zone, so as long as the price is trading above this zone, the chances for another leg up are high. The momentum remains strong and positive, but to reverse the higher timeframe trend the bulls must break through the level of 1.2907.
Weekly Pivot Points:
WR3 - 1.3395
WR2 - 1.3032
WR1 - 1.2877
Weekly Pivot - 1.2532
WS1 - 1.2380
WS2 - 1.2032
WS3 - 1.1859
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 1.2907 and it must be clearly violated. The key long-term technical support is seen at the level of 1.2231 - 1.2224 and the key long-term technical resistance is located at the level of 1.3509. As long as the price is trading below this level, the downtrend continues towards the level of 1.1957 and below.
