Technical Market Outlook:
The GBP/USD pair has extended the up move towards the level of 1.2343 despite the extremely overbought market conditions. There is a clear bearish divergence made between the price and the momentum indicator on the H4 time frame chart, so please expect a pull- back soon. Moreover, a Bearish Engulfing candlestick pattern was made at the top of the move, so the market is ready to make a correction. The nearest technical support is seen at 1.2154 and 1.2026. The bulls keeps trading inside the pitchfork upper half, so the momentum remains high and positive.
Weekly Pivot Points:
WR3 - 1.24283
WR2 - 1.23713
WR1 - 1.23415
Weekly Pivot - 1.23143
WS1 - 1.22845
WS2 - 1.22573
WS3 - 1.22003
Trading Outlook:
The bulls are temporary in control of the market and the 50% Fibonacci retracement of the last big wave down located at 1.2293 had been tested, so a down trend resumption is possible. On the other hand, the level of 1.0351 has not been tested since 1985, so the down trend is strong. In order to terminate the down trend, bulls need to close the weekly candle above the level of 1.2275 (swing high from August 10th).