- GBP/USD is finding resistance on the 4-hour time frame and is due to test yesterday’s daily lows.
- A break of resistance, however, will open prospects of a daily bullish extension.
GBP/USD has been in the hands of both the bulls and bears in a trapped environment, aka, the ‘bar-room brawl’.
The price is testing a 4-hour resistance area which could prove to remain resilient in the sessions ahead, putting downward pressure in towards a restest of the prior day’s lows as illustrated in the following analysis:
Prior analysis, daily chart
Live market, daily chart
The bearish close on the prior daily candle has left a wick that would be expected to be filled in on the lower time frames as follows:
Live market, 4-hour chart
As per the analysis above, the price has been rejected multiple times at resistances and has consolidated at a confluence of the 61.8% Fibonacci retracement level.
This reinforces the downside bias within a trapped environment.
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