GBPUSD Retreats in Search of Support

Market Analysis – May 29

The GBPUSD price has declined by around 3% since the supply level of 1.260 was challenged. On the daily chart, the rising wedge has characterized the price action of the market’s ascension. As the Stochastic shows an oversold market, a positive reversal within the wedge is likely.

GBPUSD Key Levels

Demand levels: 1.180, 1.130, 1.100
Supply Levels: 1.240, 1.260, 1.300

GBPUSD Long-Term Trend: Bullish

During the preceding year, the GBPUSD market took a downturn. From February to November, the daily candles were aligned below the Moving Averages (periods 50 and 100). The market is approaching the relative highs set by the price decline.

On the daily chart, the daily candles have tested the supportive trendline. As the price of gold falls, the prior resistance level of 1.240 is likely to become support.
Because the market is now oversold, the prior resistance level of 1.240 is expected to turn into support. Moving averages (periods 50 and 100) are also helping the market rise.

GBPUSD Short-Term Trend: Bearish

Currently, the four-hour chart is bearish. A double top can be seen at the supply level of 1.260, when the decline began. In the lower period (4-hour chart), a shift in market structure has been developed. The Stochastic has exited the oversold level and is now testing the sustaining trendline. The change in market structure is projected to keep the rise going. A breach above 1.240 is considered to signal a market turnaround.

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