GBP/USD Price Analysis: Short squeeze and of month flows set

GBP/USD bears are licking their lips for the open next week.
Supply structure is testing bearish commitments.

Ross J Burland FXStreet

As per the prior analysis, GBP/USD Price Analysis: Bears are waiting to pounce below 1.2800 we have seen a classic squeeze to end the month as follows:

GBP/USD prior analysis

GBP/USD daily chart

It was noted that the daily chart showed the price structure as an M-formation. The neckline was regarded as a resistance area around 1.2770/1.2800. Wednesday was expected to be a sell-off to below the lows of the week's initial balance which left trendline support vulnerable looking ahead.

GBP/USD update

The price moved into a demand area and subsequently reverted to the support area. We are now testing dynamic resistance and set for the week ahead.

While the impulse is strong, the 78.6% holds. Bears will be looking for a deceleration on the lower time frames for a reversion in the impulse. A break of the lower lows opes risk into the 1.2550s.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

Markets move fast. We move first.

Orange Juice Newsletter brings you expert driven insights - not headlines. Every day on your inbox.

Editor's Picks

EUR/USD trims losses and returns to the 1.1750 area

The US Dollar resumed its decline in the American afternoon, helping EUR/USD trim early losses. The pair trades around 1.1750 as market participants gear up for the European Central Bank monetary policy decision and the United States Consumer Price Index.