GPBUSD Has Created an Inverted Cup and Handle Pattern to Go Lower

GBPUSD Price Analysis – July 16

GBPUSD has created an inverted cup and handle pattern and the market is set to fall. After a sluggish start this year, bulls came alive and infused momentum into the market. The market, therefore, began an upsurge on the 5th of February 2021, springing up from the 1.36600 support. The market made it to the 1.42300 resistance on the 24th of February 2021, at which point the price was rejected. From that point, GBPUSD fell into a mini consolidation that lasted for 17 trading days. The price ranged between the 1.40000 resistance and the 1.38000 support. When the 1.38000 support eventually gave way, the price fell further to form a double-bottom pattern on the next support at 1.36600. This pushed the market up to create the inverted cup and handle pattern.

GBPUSD Key Zones

Resistance Zones: 1.42300, 1.40000
Support Zones: 1.38000, 1.36600

GBPUSD Long Term Trend: Bearish

This formation was created over 50 trading days. The formation is sandwiched between the 1.4230 resistance and the 1.3800 support level. These key levels have been very influential in determining the direction of GBPUSD. The price closed yesterday having crashed into the lower border of the handle, it is expected that lower border will soon give way for bearish moves.

The MA period 9 (Moving Average) has switched positions from above the market to below the market to lift the pattern’s handle before price falls. The Stochastic Oscillator likewise is showing that the market is experiencing a pullback in the pattern’s handle.

GBPUSD Short Term Trend: Bearish

The market can be seen undulating through an uptrend channel which is the handle of the cup. Currently, price is falling to the lower border of the channel. GBPUSD is expected to break lower from this channel in accordance with the cup and handle reversal pattern.

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