GBPUSD July 31st, 2023
GBPUSD pair has been on an upward trend since the end of 2022, as indicated by the rising trendline. This trendline acts as a support line, where prices have bounced higher. Since March, a rising wedge pattern has formed, represented by the blue area on the chart. A rising wedge pattern typically signals a potential reversal in the trend. In this case, there was a breakout of the resistance area, to be cautious as the false breakout might still be within a tolerance range, and support breakout confirmation is needed to validate the pattern.
Another crucial observation is the trading volume, which has been declining despite the continuous price rise since the end of last year. This lack of interest in trading GBPUSD indicates that many traders find it relatively expensive, leading to reduced participation in the market.
Now, let's consider the potential price targets:
Target 1: 1.24
This level represents a stable price, and it is likely seen as a significant target, possibly because it is the highest price seen at the beginning of the year. Traders might aim for this level in anticipation of a potential price stabilization or a short-term retracement.
Target 2: 1.18
Target 2 represents the lowest price seen at the beginning of the year. If the rising wedge pattern is confirmed and the prices break down below the support provided by the trendline, traders may consider this level as a possible downside target.
Target 3: 1.11
This is the last target mentioned and could be another level to watch if the bearish sentiment intensifies. However, it's important to note that this target is quite close to Target 2, and both of these levels may present strong psychological and technical support zones.
Another crucial observation is the trading volume, which has been declining despite the continuous price rise since the end of last year. This lack of interest in trading GBPUSD indicates that many traders find it relatively expensive, leading to reduced participation in the market.
Now, let's consider the potential price targets:
Target 1: 1.24
This level represents a stable price, and it is likely seen as a significant target, possibly because it is the highest price seen at the beginning of the year. Traders might aim for this level in anticipation of a potential price stabilization or a short-term retracement.
Target 2: 1.18
Target 2 represents the lowest price seen at the beginning of the year. If the rising wedge pattern is confirmed and the prices break down below the support provided by the trendline, traders may consider this level as a possible downside target.
Target 3: 1.11
This is the last target mentioned and could be another level to watch if the bearish sentiment intensifies. However, it's important to note that this target is quite close to Target 2, and both of these levels may present strong psychological and technical support zones.
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