07.02.202321:36 Forex Analysis & Reviews: Technical analysis of GBP/USD for February 07, 2023

The GBP/USD pair's fall from the price of 1.2137 extends further to 1.2036 so far today. Intraday bias stays on the downside for 1.1960 support and possibly below. Nevertheless, such decline is seen as the third leg of the corrective pattern from 1.1960.

Downside should be contained by 38.2% retracement of 1.2137 to 1.1960 at 1.2030to bring rebound. On the upside, above 1.2137 minor resistance will turn intraday bias neutral first.

Rise from 1.1960 medium term bottom is at least correcting whole down trend from 1.2070. Further rise is expected as long as 1.1960 resistance turned support holds. Next target is 38.2% retracement of 1.2137 to 1.2188 at 1.2242. Sustained break there will pave the way back to 1.2035.

The GBP/USD pair has faced strong resistances at the levels of 1.2137 because support had become resistance on February 07, 2023. So, the strong resistance has been already formed at the level of 1.2137 and the pair is likely to try to approach it in order to test it again.

However, if the pair fails to pass through the level of 1.2137, the market will indicate a bearish opportunity below the new strong resistance level of 1.2137 (the level of 1.2137 coincides with a ratio of 38.2% Fibonacci).

Moreover, the RSI starts signaling a downward trend, as the trend is still showing strength above the moving average (100) and (50). Thus, the market is indicating a bearish opportunity below 1.2137 so it will be good to sell at 1.2137 with the first target of 1.1960.

It will also call for a downtrend in order to continue towards 1.1850. The daily strong support is seen at 1.1850. The stop loss should always be taken into account, for that it will be reasonable to set your stop loss at the level of 1.2188.