The GBP/USD pair has faced strong resistances at the levels of 1.2203 because support had become resistance last week. So, the strong resistance has been already formed at the level of 1.2203 and the pair is likely to try to approach it in order to test it again.
However, if the pair fails to pass through the level of 1.2203, the market will indicate a bearish opportunity below the new strong resistance level of 1.2203 (the level of 1.2203 coincides with a ratio of 38% Fibonacci - last bullish wave - double top).
Moreover, the RSI starts signaling a downward trend, as the trend is still showing strength above the moving average (100) and (50). The trend of GBP/USD pair movement was controversial as it took place in the downtrend channel.
Due to the previous events, the price is still set between the levels of 1.2203 and 1.2000, so it is recommended to be careful while making deals in these levels because the prices of 1.2146 and 1.2054 are representing the resistance and support respectively.
Therefore, it is necessary to wait till the downtrend channel is passed through. Then the market will probably show the signs of a bearish market. It should be noted that the volatility is very high for that the price of the GBP/USD pair is still trading between the prices of 1.2146 and 1.2054 in the coming hours. Furthermore, the price has been set below the strong resistance at the levels of 1.2146 and 1.2203 which coincide with the 23.6% and 1.2203% Fibonacci retracement levels respectively.
Thus, the market is indicating a bearish opportunity below 1.2146 so it will be good to sell at 1.2146 with the first target of 1.2054.
It will also call for a downtrend in order to continue towards 1.2000. The daily strong support is seen at 1.1955.
However, the stop loss should always be taken into account, for that it will be reasonable to set your stop loss at the level of 1.2248. Moving averages, in the meantime, maintain their bearish slope way above the current level.
Furthermore, although the news is bearish for the GBP/USD pair, professional may not want to sell weakness, but rather following a rebound rally. Additionally, some aggressive counter-trend buyers may be defending parity. In case a continuousion takes place and the GBP/USD pair breaks through the support level of 1.1955, a further decline to 1.1900can occur which would indicate a bearish market
Signal :
It should be noted that the 1.2146 price will act as a minor resistance on Dec 21, 2022. Therefore, it will be too gainful to sell short below 1.2146 and look for further downside with 1.2100, 1.2055 and 1.1955 targets. It should also be reminded that stop loss must never exceed the maximum exposure amounts. Thus, stop loss should be placed at the 1.2248 level today.