FX.co ★ Technical analysis of GBP/USD for January 24, 2023

Today, the GBP/USD pair has broken resistance at the level of 1.2260 which acts as support now. Thus, the pair has already formed minor support at 1.2260.

The strong support is seen at the level of 1.2218 because it represents the weekly support 1. Equally important, the RSI and the moving average (100) are still calling for an uptrend. Therefore, the market indicates a bullish opportunity at the level of 1.2260 on the hourly chart.

Also, if the trend is buoyant, then the currency pair strength will be defined as following: GBP is in an uptrend and USD is in a downtrend. Buy above the minor support of 1.2260 with the first target at 1.2358 (this price is coinciding with the ratio of 78% Fibonacci), and continue towards 1.2435 (the weekly resistance 1 - double top - last bullish wave).

On the other hand, if the price closes below the minor support, the best location for the stop loss order is seen below 1.2435; hence, the price will fall into the bearish market in order to go further towards the strong support at 1.2302 to test it again. Furthermore, the level of 1.2260 will form a double bottom.

Bearish outlook :

The current rise will remain within a framework of correction. However, if the pair fails to pass through the level of 1.2435, the market will indicate a bearish opportunity below the strong resistance level of 1.2435 (the level of 1.2435 coincides with the double top too). Since there is nothing new in this market, it is not bullish yet. Sell deals are recommended below the level of 1.2435 with the first target at 1.2302. If the trend breaks the support level of 1.2302, the pair is likely to move downwards continuing the development of a bearish trend to the level 1.2219 in order to test the daily support 2 (horizontal red line).