Technical Analysis of GBP/USD for December 21, 2023

GBP/USD Trading Closer to the Key Support AgainUnderstanding GBP/USD Movements

In the ever-evolving world of Forex trading, GBP/USD presents a dynamic and complex market. This article offers a detailed analysis of GBP/USD as of December 20, 2023, providing key insights for traders.

Current Market Trends

The GBP/USD pair has been seen moving lower as the next wave of the ABC correction is in progress. If the bears will break below the level of 1.2614, then a new local low will be made. The intraday technical resistance is seen at the last local high at the level of 1.2648, so the bulls need to absorb all the bearish pressure and break back above this level in order to continue the up trend. The momentum on the H4 time frame chart is weak and negative, which supports the short-term bearish outlook.

Technical Indicators: Momentum and Pivot PointsThe momentum on the H4 chart is weak and negative, indicating a short-term bearish outlook.Weekly Pivot Points:WR3: 1.2905WR2: 1.2815WR1: 1.2682Weekly Pivot: 1.2592WS1: 1.2459WS2: 1.2369WS3: 1.2236

Trading Outlook: Bullish and Bearish Perspectives On the weekly chart, a Bullish Engulfing pattern beyond 1.2340 suggests a strong bullish sentiment. The market trades above the 50-week moving average, aiming for the 100-week moving average at 1.2504. However, a breakout below 1.1802 could trigger a significant downtrend towards 1.1494.

Intraday Indicator Signals: Mixed Messages11 of 21 indicators signal Sell, 5 are Neutral, and 5 indicate Buy.3 of 18 moving averages suggest Buy, while 15 indicate Sell.Market Sentiment: Overall BullishnessGeneral sentiment: 55% bullish vs. 45% bearish.Last week: 54% bullish vs. 46% bearish.Last three days: 54% bullish vs. 46% bearish.Strategic Trading InsightsBullish Scenario: Traders might consider long positions if the GBP/USD pair breaks above 1.2648, with stop-loss orders set below the weekly pivot. The target for bulls could be the WR1 level at 1.2682.Bearish Scenario: A break below 1.2614 could offer opportunities for short positions. Bears might set their targets at WS1 (1.2459) and WS2 (1.2369), with stop-loss orders above 1.2648.Useful LinksMore Artcles InstaForex Course for Beginners Open Trading AccountImportant Reminder

The begginers in forex trading need to be very careful when making decisions about entering the market. Before the release of important reports, it is best to stay out of the market to avoid being caught in sharp market fluctuations due to increased volatility. If you decide to trade during the news release, then always place stop orders to minimize losses.

Without placing stop orders, you can very quickly lose your entire deposit, especially if you do not use money management and trade large volumes. For successful trading, you need to have a clear trading plan and stay focues and disciplined. Spontaneous trading decision based on the current market situation is an inherently losing strategy for a scalper or daytrader.

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