Sumary of British Pound Technical Analysis: GBP/JPY, GBP/USD, EUR/GBP Rates Outlook:
- Both GBP/JPY and GBP/USD have rebounded from critical technical support, suggesting that further losses may be contained.
- GBP/USD RATE TECHNICAL ANALYSIS: DAILY CHART (March 2020 to July 2021) (CHART 1)Earlier this week, GBP/USD rates dropped out of the broader sideways range in place since early-February, between 1.3660 and 1.4250, which encompassed price action since February.
- But the decline in rates was quickly reversed as support come into play around a cluster of Fibonacci levels.
- While the return to the multi-month range suggests a false bearish breakout may have transpired, GBP/USD has yet to clear the downtrend from the May and June swing highs.
- We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests GBP/USD prices may continue to fall.
- Yet traders are less net-long than yesterday and compared with last week.
- Recent changes in sentiment warn that the current GBP/USD price trend may soon reverse higher despite the fact traders remain net-long.
- Like GBP/USD, more evidence is needed before confidence in a rally to the 2020 high at 156.61 takes root.