GBPUSD Technical Analysis, July 29, 2020

Exclusive Markets Analysts
Exclusive Markets Analysts


Technical Outlook:

GBPUSD seems to have topped around 1.2950 levels yesterday, or might be close to topping. Bears might remain inclined to resume lower again, at least through the 1.1900/1.2000 levels, if not lower. A push below 1.2840 would confirm a meaningful top is in place.

GBPUSD has rallied from 1.1414 through 1.2950, and had managed to carve a series of higher highs and higher lows. It might have completed an impulse rally through 1.2800 levels, which could also be Wave A of a corrective A-B-C structure.

We are going with a probable A-B-C structure at the moment, where Wave A terminated around 1.2810 mark. It was followed by Wave B towards 1.2250 and the rally towards 1.2950 yesterday might be a potential Wave C termination.

If the above counts are correct, GBPUSD would resume lower from here and push towards another low below 1.1414 before finding support. In the above case, resistance at 1.3200 would remain intact. Bears will be back in control and turn lower from here.

Alternately, the rally from 1.1414 could be seen as an impulse wave complete around 1.2950. The labels are not marked on the chart here. In that case, GBPUSD would produce a meaningful corrective drop towards 1.1900/1.2000 levels at least.

Also note that 1.1900/1.2000 is the fibonacci 0.618 retracement zone of the entire rally between 1.1414 and 1.2950 respectively. Probability remains high for a bullish reversal if prices manage to reach there. We might turn bullish from those levels.

Trading Strategy:

Remain flat for now, preparing to sell again.

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