- A Falling Wedge Pattern is in Play in the H4 Chart
- The price stays below Simple Moving Average 30
- The price had a rejection at yesterday’s higher at the H1 chart
- Horizontal support 1.26150 may play a significant role
GBP/USD: The H4 Chart Produces a Falling Wedge
The pair has been bearish in the H4 chart for some days. It had a bounce at 1.26150 earlier. Yesterday, the price had another bounce. Thus, the level has proven that it may end up being its support on the H4 chart and push the price towards the North. However, the chart also shows that the pair has been down trending by obeying a trend line. It means the chart has produced a Falling Edge pattern. In simple words, it is going to be a battle between horizontal support vs trend line’s resistance. A breakout at the horizontal support may drive the price towards the South. The price may find its next support around 1.25000.
On the other hand, if the price makes a breakout at the trend line’s resistance, it may find its next resistance around 1.30000.
Is the H1 Chart Going to Produce a Double Top or Make a Bullish Breakout?
The H1 Chart shows that the pair made a strong bearish move in the H1 chart yesterday to start its trading day. It had a strong bounce and headed towards the North. The pair started its trading with a bullish tone as well today. However, it seems to have found its resistance at yesterday’s high 1.27150. If the price makes a bearish move and makes a breakout at 1.26750, the sellers may drive the price towards the South. The level of 1.26150 may hold the price as a level of support again.
On the contrary, if the price makes a bullish breakout at 1.27150, it may find its next resistance around the trend line’s resistance.
Considering both charts, the level of 1.26150 is going to be a key factor. If it continues to be as a level of support, the pair may get bullish. If the price makes a bearish breakout and makes it a level of resistance, the pair may extend its bearish wave.
Written by: Md Tareq Sikder, Senior Analyst Forex Prop News
Contact and follow Tareq on Twitter: @tareqfpn