XM Group - Analytics

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    Technical Analysis – GBPUSD in descending channel, support at 1.41

    GBPUSD has been falling in a descending channel for a month. The lower channel line has provided support but prices have managed to rise outside the upper channel resistance line. The market is now testing 2-week highs and has found resistance at 1.4366.

    If prices continue to move up beyond 1.4380, then the 1.4500 level is the next barrier to the upside. If prices move down, there is important support at 1.4100, which if broken, would see another leg to the downside and a resumption of the downtrend that started from 1.5238 (December 2015).

    The daily technicals are bearish as the tenkan and kijun lines are negatively aligned and are falling. The market is below the daily Ichimoku cloud and below the 200-day moving average. RSI is in bearish territory below 50. The market would need to rise beyond 1.4500 in order to show that the recent upmove is not simply a corrective move of the recent downtrend.

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