- GBP/USD bears are licking their lips around daily resistance.
- Bears eye a long squeeze for fresh lows of the week.
GBP has been the market’s darling this week so far as the initial balance extends higher and higher. However, as the following charts illustrate, there could be a turnaround on the cards soon.
GBP/USD monthly chart
The bulls are in the market with plenty of upside potential left in the price’s current trajectory with eyes on a break of 1.2850 to open risk to 1.3000.
GBP/USD weekly chart
The weekly chart is starting to look exhausted the bid, however, after already extending the move into a -272% Fibonacci of the prior bearish correction. Last week was a first red week and the move inside of the range to the upside could be shortlived and met by sellers in the coming days if not next week if this week closes inside as an inside bar.
GBP/USD daily chart
Meanwhile, the daily chart shows the price structure as an M-formation. The neckline is regarded as a resistance area around 1.2770/1.2800. Wednesday could be stacking up to be a sell-off to below the lows of the week’s initial balance which leaves trendline support vulnerable looking ahead.