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  • GBP/USD needs to clear Wednesday’s high to weaken bearish pressures. 
  • A break below the weekly open could prove costly. 

GBP/USD is currently trading at 1.2430, having put in a low of 1.2408 early Thursday. 

The pair needs to establish a strong foothold above 1.2543 to invalidate the negative view put forward by Wednesday’s bearish outside day candle. 

That looks unlikely, given the renewed coronavirus scare, tensions between the US and China and the US and European Union, and the resulting risk aversion. The Dow Jones Industrial Average fell by over 600 points on Wednesday. 

In addition, the long upper wicks attached to GBP/USD’s previous two weekly candles show a strong sell-on-rise mentality. 

The pair, therefore, risks falling back to 1.2408, under which, major support is seen directly at 1.2342 (weekly open). A violation there would validate the bearish or below-50 reading on the 14-week relative strength index and will likely yield a quick sell-off to 1.2070 (May low). 

Daily chart

Weekly chart

Trend: Bearish

Technical levels