GBPUSD – Remains Bearish After Consolidation

Cable remains in consolidation mode on Friday having come under extreme pressure during the first three days of the week.

The pair fell below 1.40 for the first time in almost seven years this week and having edged back towards this level since on what appears to be profit taking, it is now finding resistance here. The flag that has formed it typically a continuation pattern and therefore bearish in this case.

GBPUSD Daily

While this is a natural resistance for the pair, being a key psychological level, I think we could see consolidation continue and 1.4050, previous support, tested as new resistance.

The stochastic and MACD both support this with neither currently showing signs of upward momentum waning. That of course isn’t to say it won’t and as yet, 1.40 is holding firm.

GBPUSD 4hr

If we do see a break below the flag, the next significant support could be found around 1.3650 – March 2009 lows – followed by 1.35 – January 2009 lows.

Craig Erlam
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.