GBP/USD - short term bearish but still within ascending channel

GBP pairs saw an extremely volatile week as a result of COVID-19 vaccine news. The announcement, which was at the start of the week, saw GBP skyrocket against other currencies; JPY & CHF in particular. On GBP/USD this sent price soaring through resistance at 1.3175 and into the descending weekly trends. After touching the 1.3295 level, the weekly trends held price in place and, coupled with bullish exhaustion, sent price back to 1.3110. On the daily timeframe price formed a lower high when compared with the high of 1st Sept, but is still captured within an ascending channel structure.

This upcoming week there are two scenarios that we will be watching out for. We expect price to eventually meet the lower boundary of the channel structure. The bullish scenario from there will see price reject the lower boundary of the channel and possibly support at 1.3060, sending prices back up to 1.3175 and 1.3295. On the bearish scenario, if we see a break of the channel structure, it will likely mean a return to 1.2720 is on the cards.