FX.co ★ Technical Analysis of GBP/USD for January 27, 2023

Technical Market Outlook:

The GBP/USD pair bounce was capped at 1.2447 and since then the market keeps moving lower. The bears were able to make a three wave down cycle already, so the level of 1.2288 will now act as a technical support and the bottom for the wave W. The overall corrective cycle is now evolving onto more complex and time consuming WXY pattern and wave X is in progress. The momentum is weak and negative, which supports the short-term bearish outlook for GBP, however, the recent breakout above the technical resistance seen at the level of 1.2335 might be a trigger to test the level of 1.2447 again. The deeper technical support is seen at the level of 1.2171 and 1.2210 (100 MA).

Weekly Pivot Points:

WR3 - 1.27181

WR2 - 1.25331

WR1 - 1.24338

Weekly Pivot - 1.23481

WS1 - 1.22488

WS2 - 1.21631

WS3 - 1.19781

Trading Outlook:

The bulls are temporary in control of the market and the next target for bulls is 61% Fibonacci retracement level (1.2760). So far the level of 1.2443 was too strong resistance to break through, so a potential Double Top price pattern might be in play. The confirmation of the pattern comes with the level of 1.2089 breakout with a potential target at the level of 1.1840.