The GBP/USD pair has dropped sharply from the 1.2911 level towards 1.2838. Now, price is set at the 1.2838 to act as a minor support.
It should be noted that the volatility is very high for that the price of the GBP/USD pair is still moving between 1.2911 and 1.2737 in the coming hours.
Furthermore, the price has been set below the strong resistance at the levels of 1.2911 and 1.2955 which coincide with the 23.6% and 38.2% Fibonacci retracement levels respectively.
Additionally, currently the price is in a bearish channel. According to the previous events, the pair is still in a downtrend.
From this point, the GBP/USD pair is continuing in a bearish trend from the new resistance of 1.2911.
Thereupon, the price spot of 1.2911 remains a significant resistance zone.
Therefore, the possibility that the Pound will have a downside momentum is rather convincing and the structure of the fall does not look corrective.
In order to indicate a bearish opportunity below 1.2911, it will be a good signal to sell below 1.2911 with the first target of 1.2785.
It is equally important that it will call for downtrend in order to continue bearish trend towards 1.2785.
However, the stop loss should be located above the level of 1.3028.
Tips :
Important tips to remember about trend lines:
When constructing a channel, both trend lines must be parallel lines to each other. Predominantly, the bottom of channel is considered a buy area while the top of channel is considered a sell area. Like in drawing trend lines, do not ever force the price to the channels that you draw! A channel limit that is slanting at one angle while the corresponding (parallel) channel limit is slanting at another is not correct and could lead to bad trades. Channels are just another tool in technical analysis which can be used to determine good places to buy or sell. Both the tops and bottoms of channels represent potential areas of support or resistance.