Bearish Corrective Scenario: Sell positions below 1.3130 with TP1 at 1.3103. Consider TP2: 1.3090, TP3: 1.3076, and TP4: 1.3057 only after a decisive break. Use a stop-loss (S.L.) above 1.3160 or at least 1% of account equity for intraday trades.
Bullish Scenario: Buy positions after a pullback (with prior PAR* formation) above 1.3103 with TP1: 1.3142, TP2: 1.3160, and TP3: 1.3172 on extension. Use a stop-loss below 1.3088 or at least 1% of account equity. Apply a trailing stop.
Fundamental Analysis:
The British pound (GBP) remains near its yearly high of 1.3130 against the dollar (USD), buoyed by ongoing optimism from a rise in UK consumer confidence according to the GfK index. Additionally, the Bank of England’s expectations of potential rate adjustments following Andrew Bailey’s speech further support the bullish trend.
However, the recent strengthening of the dollar, driven by a rebound in bond yields and anticipation ahead of Jerome Powell’s Jackson Hole address, limits further gains for the pound. Depending on central bank remarks, this context heightens volatility and could trigger short-term pullbacks.
Technical Analysis
GBPUSD, H2
- Supply Zones (Sells): 1.3160
- Demand Zones (Buys): 1.3102, 1.3026
The pair hit 2024 highs after breaking the July resistance at 1.3044, aiming to surpass the 2023 resistance at 1.3142 toward 1.3159 (a macro sell zone that was the broken support from December 2021 and resistance in April 2022) and potentially 1.32.
To extend gains toward these levels, the pair must stay above the last intraday demand zone between today’s Asian POC at 1.3102 and yesterday’s volume concentration near today’s opening at 1.3089.
If the subsequent rise reaches and exceeds the 80% and 100% Fibonacci extensions, the 1.3076 level will be validated as the last significant intraday point of the uptrend.
However, under the current scenario, if the price fails to decisively break Thursday’s resistance at 1.3129 and sellers push decisively below the nearest demand zone (between the Asian POC at 1.3102 and yesterday’s volume concentration near 1.3090), a broader correction would be confirmed, with further targets at 1.3056, 1.3044, and possibly the uncovered POC* at 1.3026.
The bullish bias remains intact as long as the last significant support of the uptrend at 1.3011 holds. A decisive break of this level, confirmed with a second lower low, would trigger an intraday bearish reversal.
Note:
*Uncovered POC: The Point of Control (POC) is the level or zone with the highest volume concentration. If a downward movement originated from this point, it is considered a sell zone and forms resistance. Conversely, if it led to an upward movement, it is a buy zone, often forming support levels.
