GBPUSD heading towards long-term bearish trend line, cautious investors wait
The medium-term bullish trend of the GBPUSD pair is still intact and the bulls are slowly pushing this pair towards the major bearish trend line resistance at 1.42050.Most of the leading investors have already gone long after the pair hit the 50% bullish retracement level on the daily chart. Traders are expecting a decent fall in the GBPUSD pair once it reaches critical resistance level at 1.42050.However, a daily closing of the price above the critical resistance level will eliminate any bearish threat to this pair. This will eventually lead this pair towards the next major resistance level at 1.46045.On the contrary, rebound from that critical resistance level will turn the initial bias from bullish to neutral.
GBPUSD daily chart analysis
Figure: GBPUSD bouncing off from the 50% bullish retracement level
From the above figure, you can clearly see that the bulls have taken control of this market after the pair hit the major support level at 1.39750.The pair needs to break below the 50% bullish retracement level in order to create fresh selling momentum in the market. Most of the conservative price action traders will be looking for bullish price action confirmation signal near the 61.8% retracement level to execute long orders. A solid break of the major support level at 1.39180 will confirm the end of the current bullish rally and this will eventually lead this pair towards the 100 days SMA.
GBPUSD weekly chart analysis
Figure: GBPUSD heading towards the 200 weekly SMA
In the weekly chart, the pair is slowly heading towards the 200 weekly. Prior to the closing the last week, the weak NFP data release clearly demonstrated the U.S economy is struggling hard to recover from its recession period. The Cable bulls will definitely take the advantage of the weak U.S dollar which will eventually push the GBPUSD pair higher in the global market. If the bulls manage to clear the 200 weekly SMA, we might see another retest of the major resistance level at 1.45372.Any bearish price action confirmation signal near that critical resistance level will be an excellent opportunity to short this pair. A clear break of the critical resistance level 1.45372 will eventually lead this pair towards the next major resistance level at 1.50200
On the downside, we have a strong support level at 1.38220.This level is going to provide a significant amount of buying pressure to the GBPUSD pair to the long-term traders. However, we might experience ranging market in the upcoming trading week before we see a strong rally in this pair. If the bears manage to clear out the support level at 1.38220, the pair will sharply decline towards its next major support level at 1.35947.We have minor support level in this place which might cease the free downfall of this pair. Considering all the daily and weekly chart analysis, the pair is most likely to trade in a range between 1.43442 – 1.38220