GBP/USD technical analysis: headline driven
20:10, 5 October 2020
The British pound continues to trade in a wide range against the US dollar, as Brexit and US political news continues to generate short-term volatility for sterling.
GBP to USD analysis shows that the next major directional breakout should take place once the 1.2800 to 1.3000 price range is broken.
GBP/USD medium-term price trend
Sterling continued its recovery from the 1.2770 level last week, as US dollar weakness helped to give the pair a notable boost.
GBP/USD technical analysis highlights that bulls need to move the price above 1.3025 to increase medium-term buying interest.
The daily time frame shows that a false breakout from a large triangle pattern may have taken place. Bulls are now moving price back towards the former breakout area, at 1.3025.
If bulls move the price above 1.3025 then a rally towards the top of the triangle pattern, around the 1.3380 region, may take place.
The 1.3140 and 1.3230 levels offer formidable technical resistance prior to the 1.3380 level.
Traders should note that a strong reversal towards the 1.2800 area is expected, and increased downside pressure, if bulls fail to overcome 1.3025.
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GBP/USD short-term price trend
GBP/USD technical analysis shows that the pair only has a neutral trading bias while the price trades between 1.2800 and 1.3000.
The four time frames show that a bullish inverted head-and-shoulders pattern will be activated if the price holds above 1.3000.
Technical analysis highlights the 1.3140 and 1.3200 levels as potential upside targets if the pattern is activated.
A sustained breakout below 1.2800 exposes further downside towards the 1.2770 and 1.2600 levels.
GBP/USD technical summary
GBP to USD analysis shows that a bullish inverted head-and-shoulders pattern will be activated if the price moves above 1.3000.
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