FX.co ★ Technical analysis of GBP/USD for August 29, 2022

The GBP/USD pair faced resistance at the level of 1.1836, while minor resistance is seen at 1.1735. Support is found at the levels of 1.1647, 1.1600 and 1.1550. Also, it should be noted that a daily pivot point has already set at the level of 1.1836.

Equally important, the EUR/USD pair is still moving around the key level at 1.1713, which represents a daily pivot in the H1 time frame at the moment. the EUR/USD pair continues to move downwards from the areas of 1.1735 and 1.1764.

Yesterday, the pair dropped from the level of 1.1895 which coincides with a ratio of 50% Fibonacci on the H1 chart to 1.1647.

Today, resistance is seen at the levels of 1.1836 and 1.1895. So, we expect the price to set below the strong resistance at the levels of 1.1836 and 1.1895; because the price is in a bearish channel now.

The RSI starts signaling a downward trend. Consequently, the market is likely to show signs of a bearish trend. Thus, it will be good to sell below the level of 1.1836.

Amid the previous events, the price is still moving between the levels of 1.1836 and 1.1600 in coming hours. In overall, we still prefer the bearish scenario as long as the price is below the level of 1.1836 .

Furthermore, if the EUR/USD pair is able to break out the bottom at 1.1647, the market will decline further to 1.1600 (daily support 2).

Hence, the price will fall into a bearish trend in order to go further towards the strong support at 1.1550 to test it again. The level of 1.1550 will form a new double bottom.

On the other hand, if the price closes above the strong resistance of 1.1895, the best location for a stop loss order is seen above 1.1953.

As long as the invalidation level of this analysis is not breached (1.1895), the bearish direction is still favored, however the current short term correction should be carefully watched. The bulls must break through 1.1895 in order to resume the up trend.