FX.co ★ Technical Analysis of GBP/USD for February 3, 2023

Technical Market Outlook:

The GBP/USD pair bounce was capped at 1.2447 and after the Bank of England hiked the interest rate yesterday, the bears broke through the technical support located at the level of 1.2264 and are moving lower towards the 50% Fibonacci retracement level (1.2144) or 61% Fibonacci retracement level (1.2074). The level of 1.2242 will now act as a technical resistance 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 in progress. The momentum is weak and negative, which supports the short-term bearish outlook for GBP.

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.