FX.co ★ Trading plan for GBPUSD for January 08, 2021

Technical outlook:

GBPUSD might have finally carved a meaningful top around 1.3703 levels on January 04, 2021. The Cable currency pair is seen to be trading around 1.3594 levels at this point in writing after having dropped through 1.3532 levels yesterday. Immediate resistance is now seen around 1.3700, while support is at 1.3450, followed by 1.3300 levels respectively.

A break below 1.3450 and subsequently 1.3300 would confirm that bears are back in control and are here to stay for long. The overall structure since March 2020 lows at 1.1414 and 1.3700 highs also looks to be complete since bulls have managed to take out a major past resistance at 1.3515 levels.

Going with the above analogy, high probability remains for a meaningful corrective drop towards 1.2200 levels, which is also fibonacci 0.618 retracement of the entire rally between 1.1414 and 1.3700 respectively. Initial strong support is seen around 1.3200 levels and a break below will accelerate the proposed drop further.

Trading plan:

Remain short for now, stop @ 1.3750, target is 1.2675

Good luck!