The GBPUSD price is forming a reversal pattern which could lead to a complete trend reversal.
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The strength meter this week is highlighting a potential reversal to come for the GBP and after some positive statements from the Bank of England we could see GBP strengthen against weaker currencies. The USD has weakened recently after the Federal Reserve has hiked interest rates to try and control the way in which inflation is rising. They have also stated they will look to hike rates further with a view to see inflation halve by the end of the year.
Looking at the weekly time frame we can see that the price has formed a bullish rejection of the 1.3000 level. This could show us that the price is going to reverse back to the previous weekly lows around 1.3400. Going on the 4hr time frame we can see that the market is forming a bullish reversal pattern with the price looking to form an inverse head and shoulders pattern. If the price breaks above the neckline area around 1.3200 we can look for long trading opportunities.
Did you see our week ahead analysis? you can see it here.
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