Technical analysis of GBP/USD for May 04, 2023
Overview : The GBP/USD pair traded higher and closed the day in the positive territory near the price of 1.2498. Right now, it was trading in a narrow range of 1.2536 staying close to a 2-days high. On the hourly chart, the GBP/USD pair is still trading above the MA (100) H1 moving average line (1.2498 - weekly pivot point). The situation is similar on the 4-hour chart. Based on the foregoing, it is probably worth sticking to the north direction in trading, and as long as the GBP/USD pair remains above MA 100 H1, it may be necessary to look for entry points to buy for the formation of a correction.All elements being clearly bullish, it would be possible for traders to trade only long positions on the GBP/USD pair as long as the price remains well above the golden ratio of 1.2498. The buyers' bullish objective is set at 1.2209. The price is likely to form a double top in the same time frame. Accordingly, the GBP/USD pair is showing signs of strength following a breakout of the highest level of 1.2209. So, buy above the level of 1.2498 with the first target at 1.2209 in order to test the daily resistance 1. The level of 1.2209 is a good place to take profits. Moreover, the RSI is still signaling that the trend is upward as it remains strong above the moving average (100). This suggests that the pair will probably go up in coming hours. A bullish break in this resistance would boost the bullish momentum. Other outlook for the GBP/USD pair : Pound Sterling is currently trading at 1.2536. If the trend reverses from this point, then a possible future share price target could be 1.2611. If the price of Pound Sterling is trading above 1.2536 then possibility of upside targets getting achieved is higher around the level of 1.2536. The basic bullish trend is very strong on the GBP/USD pair, but the short term shows some signs of running out of steam. Nevertheless, a purchase could be considered as long as the price remains above 1.2536. Crossing the first resistance at 1.2588 would be a sign of a potential new surge in the price. Buyers would then use the next resistance located at 1.2621 as an objective. Crossing it would then enable buyers to target 1.2621. Caution, a return to below 1.2621 would be a sign of a consolidation phase in the short-term basic trend. If this is the case, remember that trading against the trend may be riskier. It would seem more appropriate to wait for a signal indicating reversal of the trend. In the very short term, the general bullish sentiment is not called into question, despite technical indicators being indecisive. All elements being clearly bullish market, it would be possible for traders to trade only long positions on the GBP/USD pair as long as the price remains well above the price of 1.2498. The GBP/USD pair will continue rising from the level of 1.2498 in the long term. It should be noted that the support is established at the level of 1.2498 which represents the last bearish wave. The price is likely to form a double bottom in the same time frame. Accordingly, the GBP/USD pair is showing signs of strength following a breakout of the highest level of 1.2498. So, buy above the level of 1.2498 with the first target at 1.2209 in order to test the daily resistance 1. The buyers' bullish objective is set at the level of 1.2621 (last bullish wave). A bullish break in this resistance would boost the bullish momentum. The buyers could then target the resistance located at 1.2621 . This suggests that the pair will probably go up in coming hours. If the trend is able to break the level of 1.2209 (double top), then the market will call for a strong bullish market towards the objective of 1.2621 this week. If there is any crossing, the next objective would be the resistance located at 1.2621. The level of 1.2621 is a good place to take profits. Moreover, the RSI is still signaling that the trend is upward as it remains strong above the moving average (100). Since the trend is above the 61.8% Fibonacci level (1.2498), it means the market is still in a uptrend. From this point, the GBP/USD pair is continuing in a bullish trend from the new support of 1.2498. This is shown to us as the current price is in a bullish channel. According to the previous events, we expect that the GBP/USD pair will move between 1.2498 and 1.2621 in coming hours. It is also should be noted, beware of bullish excesses that could lead to a possible short-term correction; but this possible correction would not be tradeable. On the other hand, in case a reversal takes place and the GBP/USD pair breaks through the support level of 1.2498, a further decline to 1.2403can occur. It would indicate a bearish market.