Missed the long-term trend line break on GBP/USD?
As you can see on the 4-hour chart below, the pair fell through the rising support zone connecting the lows since the beginning of the year.
Better keep these correction levels on your radar if you’re hoping to catch a major reversal.
GBP/USD: 4-hour
GBP/USD 4-hour Forex Chart by TradingView
Cable had been cruising on a steady uptrend so far this year, but the tide seems to be turning as the pair just broke through its ascending trend line.
Although the U.K. economy has been showing some signs of stability, sterling proved no match to safe-haven flows kicking in strongly during Trump’s tariffs regime.
Can a retest of the former support zone attract more selling pressure?
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the British pound and the U.S. dollar, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
GBP/USD is approaching the 38.2% Fibonacci retracement of the breakdown at the 1.2900 major psychological resistance, and a larger pullback could also test the 50% Fib at 1.2956 or the 61.8% level at 1.3016.
If any of these are able to keep gains in check, look out for a continuation of the slump to the swing low just below S1 (1.2760) or to fresh lows at S2 (1.2630) then S3 (1.2410).
The 100 SMA is still above the 200 SMA to reflect bullish momentum, although the gap is narrowing to hint at a possible crossover, so be ready in case the pair lands back above the trend line to set its sights on the swing high close to R1 (1.3120) or higher.
Note that the pair is trading below both moving averages, so these could hold as dynamic resistance levels near the Fibs, too.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment!
