FX.co ★ Technical Analysis of GBP/USD for January 31, 2023

Technical Market Outlook:

The GBP/USD pair bounce was capped at 1.2447 and since then the market has been moving in a trading range below the local trend line. The level of 1.2262 will now act as a technical support and the bottom for the corrective wave W. The overall corrective cycle is now evolving onto more complex and time consuming WXY pattern, where waves W and Y are done and wave Y is still missing. The momentum is weak and negative, which supports the short-term bearish outlook for GBP. The next technical support is seen at the level of 1.2171 and 1.2210 (H4 time frame 100 MA).

Weekly Pivot Points:

WR3 - 1.24596

WR2 - 1.24223

WR1 - 1.24021

Weekly Pivot - 1.23850

WS1 - 1.23648

WS2 - 1.23477

WS3 - 1.23104

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.