GBPUSD technical analysis for January 12, 2016

GBP/USD remains in a strong down trend inside a bearish channel, but there are signs that bears should be very cautious as I believe around 1.4450 we should expect a big reversal and strong bounce in this pair.

GBPUSD is trading inside a bearish channel as shown in the 4-hour chart above. Trend remains bearish as price is trading below the Ichimoku cloud and both the tenkan- and kijun-sen indicators. Stochastic oscillator is oversold providing some bullish divergence signals. Beas should protect their profits if price breaks above 1.4610. Downward target is at 1.4450.

In the weekly chart we also find oversold oscillator readings. A bounce towards 1.52 is possible although bulls will first have to break above 1.46-1.4650 in order to regain short-term control of the trend. Concluding, bears are in control but I believe they should protect their short positions by lowering their stops as a bounce is expected.