FX.co ★ GBPUSD has fair chances of an upside reversal.

GBPUSD technically remains in a bearish trend as it continues making lower lows and lower highs. Price has reached 1.31 and recently made a low around 1.3080. Although there is no sign of a reversal yet and the next major support is found at 1.2930-1.2950, there are some signs that could hint of a coming reversal.

Blue line -support

Green lines -bullish divergence

GBPUSD is making new lows but the RSI is not. This is a bullish divergence and is the first hint of a possible trend reversal. The downward momentum is weakening according to the RSI. This is not a reversal signal but only a warning to bears. Bears need to be very cautious. Price continues trading inside the expanding wedge pattern since July of 2021. Price is approaching the lower wedge boundaries. These boundaries are at 1.2930-1.2950 area. There is downside potential, but the risk reward ratio does not favor opening new short positions at current levels.