GBP USD- CLOSE TO WEEKLY RANGE
The GBP USD has been moving in step with the EURO USD as both pairs decline in sync with strong gains for the Greenback across the Forex market. Similar to the EURO USD, the Sterling pair is closing in on its Weekly Range target which lies only 120 pips away. When that area is hit in the next few days, we could see a temporary pullback or consolidation take place before the downtrend continues. On the other hand, the slow and staggered nature of the downtrend also points to the possibility of a large Range being formed in the months ahead.
Daily Chart below shows that the pair is very close to hitting its first Weekly Range target of the new downtrend.
Within a very short time after hitting this price area, we could see one of two alternate scenarios unfolding.
- A Pullback/Small Consolidation;
- New Bearish Signal to Continue Downtrend;
If the downtrend is going to continue in the next few weeks, we could either have a temporary pullback or a small consolidation being formed. This will then give way to another bearish signal to resume the existing trend direction.
After resuming the trend, the currency pair will decline until the 2nd Weekly Range Target is hit.
- A Rally that starts a Consolidation;
The slow nature of the downtrend suggests that a Consolidation could also be formed over the next few months. If this is going to take the form of a Range, then the Weekly Range target that will be hit would represent the Support boundary of that Range.
Only time and traders will show us what actually transpires in the next few days. However, given the manner in which currency pairs behave based on the types of candles and their Weekly Range, these are likely to be the scenarios to look out for going forward.
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