FX.co ★ Technical analysis of GBP/USD for May 23, 2016

Overview:

• The GBP/USD pair broke support which turned to strong resistance at the level of 1.4500. The level of 1.4500 is expected to act as major resistance today. From this point, we expect the GBP/USD pair to continue moving in a bearish trend from the resistance level of 1.4500. Currently, the price is moving in a bearish channel. This is confirmed by the RSI indicator signaling that we are still in the bearish trending market. Consequently, the first support is set at the level of 1.4338 (double bottom). So, the market is likely to show signs of a bearish trend around the spot of 1.4500 - 1.4537. In other words, buy orders are recommended above the spot of 1.4500 - 1.4537 with the first target at the level of 1.4410; and continue towards 1.4338. This would suggest a bearish market because the moving average (100) is still in a positive area and does not show any trend-reversal signs at the moment. Moreover, if the GBP/USD pair succeeds to break through the strong support at 1.4338. Then the market will decline further to 1.4169. The pair is expected to drop lower towards at least 1.4169 in order to for a new double bottom this week.

Intraday technical levels:

• R3: 1.5000
• R2: 1.4831
• R1: 1.4669
• PP: 1.4500
• S1: 1.4338
• S2: 1.4169
• S3: 1.4007