FX.co ★ Technical analysis of GBP/USD for September 08, 2022

The GBP/USD pair traded at 1.1900 this Monday Sept. 08th, decreasing from the level of 1.1618 since the previous trading session. The British pound (GBP) has fallen over 5% against the US dollar (USD) since the start of the year. With UK inflation elevated and still rising, the cost-of-living crisis taking hold, growth slowing and ongoing Brexit woes, the outlook for the pound is deteriorating.

Looking back, over the last weeks, GBPUSD lost 1%. Over the last 6 weeks, its price fell by 11%. Looking ahead, we forecast British Pound US Dollar to be priced at 1.1400 by the end of this week and at 1.1365 in the end of Sept.

According to the previous events, we expect the GBP/USD pair to trade between 1.1618 and 1.1400. So, the support stands at 1.1400, while daily resistance is found at 1.1618.

Therefore, the market is likely to show signs of a bearish trend around the spot of 1.1936. The GBP/USD pair continues to move upwards from the level of 1.1936.

Today, the first support level is currently seen at 1.1442, the price is moving in a bearish channel now. Furthermore, the price has been set below the strong resistance at the level of 1.1618, which coincides with the 38.2% Fibonacci retracement level.

This resistance has been rejected three times confirming the veracity of a downtrend. It should be noted that volatility is very high for that the GBP/USD pair is still moving between 1.1550 and 1.1400 in coming hours.

Moreover, the price spot of 1.1550/1.1680 remains a significant resistance zone. Therefore, there is a possibility that the GBP/USD pair will move downside and the structure of a fall does not look corrective.

Thus, the trend is still bearish as long as the level of 1.1680 is not breached. In order to indicate the bearish opportunity below 1.1680, sell below 1.1680 with the first target at 1.1400 in order to test yesterday's bottom.

Additionally, if the GBP/USD pair is able to break out the bottom at 1.1400, the market will decline further to 1.1365 in order to test the daily support 2.

At the same time, if a breakout happens at the resistance levels of 1.1618, then this scenario may be invalidated. But in overall, we still prefer the bearish scenario.

Forecast :

Pound Sterling is currently trading at 1.1498. However, if the trend reverses from this point, then a possible future share price target could be 1.1400. If the price of Pound Sterling is trading below 1.1498 then possibility of downside targets getting achieved is lower around the levels of 1.1400 and 1.1365.