GBPUSD has become non-volatile and impulsive after gaining bearish momentum. GBPUSD broke below the 1.25 area, which is an important psychological level. Is this the end of the bullish trend? What are the charts and technical indicators are saying? Read more to find further insights into today’s GBPUSD Technical Analysis.
June 19, 2020, | AtoZ Markets – GBPUSD is currently trading around 1.2410 area and trying to retrace higher. The price also broke below the dynamic level of 20 EMA on the daily chart. As per the current price action, after an impulsive bearish pressure, GBPUSD may retrace higher in the process.
British customers purchased considerably more than anticipated in May as the nation bit by bit loosened up its coronavirus lockdown and online retailers blasted. Adding to signs that the economy is moving ceaselessly from its notable accident in March and April. On the other hand, official data showed that people are taking hit an all-time high. As like, the government unfolded the consumption plug and debt accepted 100 per cent of economic yield.
Besides, President of the Federal Reserve Bank, Neel Kashkari said, “My base-case scenario is that we are going to continue to see peaks, second waves, etcetera, unfortunately, for the rest of the year until we get to some form of effective therapy or some form of vaccine or very, very widespread testing, and we are not there yet.” He also added, “That means our economic recovery is likely to be bumpy, and it’s going to be more muted.”
GBPUSD Broke Important Support as Public Purchase Hit the Ceiling
GBPUSD broke below 1.25 area after rejecting 1.28 resistance level. Moreover, the price had a daily impulsive bearish close below 1.25 area, which indicates bears are quite strong.
Image: GBPUSD 4 Hour Chart
According to the 4-hour chart, GBPUSD is currently residing near 1.2410 area and trying to recover higher. Furthermore, after breaking below the 1.25 area, the price may retrace higher. So, if the price reaches 1.25 area and rejects, the bears may regain momentum and sustain the bearish pressure towards 1.2290 support area.
In addition, the dynamic level of 20 EMA is currently residing above the price. Along with the Kijun line and the Tenkan line. The dynamic level may pull the price back to the Mean. The Kijun line and the Tenkan line may work as a confluence of the dynamic level. Besides, the MACD is currently residing below 0.00 level and may have a bullish crossover. Also, the histogram showing the bullish divergence, which indicates bulls are gaining momentum.
GBPUSD Bullish Trend Is Still Active
According to the daily chart, GBPUSD broke below the uptrend line, but the bullish trend is still active as the breakout is not quite strong. As per the current price action, if the price can have a daily bullish close above 1.25 area, the bulls may push the price higher towards 1.28 area. Alternatively, if the price can have another bearish close below the uptrend line, the bears may push the price down towards 1.2290 area in the coming days.
Image: GBPUSD Daily Chart
Furthermore, the dynamic level of 20 EMA is currently residing above the price, which may act as strong resistance. In contrast, if the price breaks above the dynamic level, the bulls may regain momentum and recover higher. Besides, the MACD lines are currently residing above the 0.00 level and gradually rising upward. It indicates that bulls are still present in the market.
To conclude, after gaining around 600 pips, GBPUSD retraced down almost fifty per cent of the bullish trend in just two weeks. A daily close is required to find the definite momentum in the coming days.