GBP/USD Price Analysis: Cable moves above flat after finding support at 1.27

GBP/USD daily chart

Cable has made a lower high lower low wave pattern but just recently found some support. The support level happened to be exactly at the 138.2% Fibonacci support area at the 1.27 figure. The next major support is the red line at 1.2615 and this looked like the logical area for the price to stop but the market found some bids ahead of the zone.

Above the current price level, the blue line at 1.2815 could be the next resistance. If the bears come out at that level then the aforementioned red support could be the target. Beyond that, there is another decent support level at 1.2265 which the bears could test but it is some way off at the moment. 

The indicators are very bearish at the moment. The MACD histogram is firmly red and the signal lines have just crossed to the downside. The Relative Strength Index (RSI) is depressed but it is picking up off the lows. There is an interesting set-up on the indicator though which could be slightly bullish. If the RSI wave high breaks there could be a move higher.

This pattern is a reversal pattern. There has been a lower high lower low and the Dow theorists amongst you would realise this is very important. The bulls will be looking at a break of the blue resistance and if there is a break there it could mean the uptrend is back on but for now, the bears remain in charge.

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