GBPUSD Rising Wedge and Bearish Divergence Calls for a Move Back to 1.30

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Written By: Mircea Vasiu
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    Summary:
  • Rising wedge and bearish divergence with the RSI spell trouble for GBPUSD bulls. 1.30 might come sooner rather than later.

The GBPUSD pair traded with a bullish tone the entire week. In fact, the USD bearish move continued on all G10 pairs, especially during the Thanksgiving week when reversals are unlikely. As such, we should not be surprised that so late into the trading week, the GBPUSD still holds a bid tone.

However, it comes closer to breaking a rising wedge – a bearish pattern. Moreover, the rising trend formed during a bearish divergence with the RSI. No matter how you put it, one cannot ignore the bearish signs.

Brexit still seems far away as the European Commission announced that divergences remain. Moving forward, there are literally only three events that matter for cable – the NFP next week, the Fed in three weeks from now, and the Brexit outcome.

GBPUSD Technical Analysis

This is the hourly chart, and so it is susceptible to a move even today. Bears would like to sell a break below the lower edge of the pattern and place a stop loss at the 1.3400 level. A proper target needs a risk-reward ratio bigger than 1:2, so 1.3150 will do the trick. However, once there, bears might consider trailing stops and aiming for 1.30.

GBPUSD Price Forecast

Written By: Mircea Vasiu

Mircea, MBA in International Business graduating Magna Cum Laudae, trades for a living and contributes to various financial publications for more than six years. He writes about macroeconomics, stock indices, currencies, and most recently ETFs and individual stocks. For the past decade, he’s involved in everything trading related, mostly in the currency market, both with manual and algorithmic trading.

Published by
Written By: Mircea Vasiu