The #GBPUSD could be forming a head and shoulders pattern on the weekly time frame. Could this offer us a clue to the direction of the price this week?
Watch the video to learn more…
Last week we looked at the GBPUSD price ahead of the Bank of England announcement and discussed the potential for the market to reach the 1.3600 level and reject it. It turned out that sellers were waiting at this level and the price moved lower. The USD however has taken a bearish turn recently which was unexpected and largely due to a dismissal of a 50bps jump in rates. If this weakness continues this week the GBPUSD price could move higher.
If we take a look at the weekly time frame we can see that the price looks to be forming an inverse head and shoulders pattern. The 1.3400 level is being held as support with the market potentially forming a higher low here and the right shoulder of the pattern.
The 4hr time frame shows price is consolidating, if the price breaks out of this pattern we could expect the weekly head and shoulders pattern to play out. The price will likely move towards the descending neckline at 1.3700 offering long opportunities.
Did you see our week ahead analysis? Watch it here.
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