I’ve been closely analyzing GBP/USD, and right now, I’m assessing whether the recent drop is just a pullback within an uptrend or the start of a full reversal into bearish territory.
Pullback vs. Reversal: What I’m Looking For
Pullback Characteristics: A pullback is typically a short-lived dip before the trend resumes. If GBP/USD stabilizes around 1.3030–1.3050 and then rebounds, it would confirm that buyers are still in control and the overall bullish trend is intact. Moving averages (like EMA and KAMA) should continue to slope upward in that scenario.
Reversal Characteristics: A full reversal happens when price breaks major support levels (like 1.2990) and shows bearish confirmation—things like a bearish engulfing candle, lower highs/lows, and negative momentum signals. If key indicators (like RSI dropping below 30 and MACD turning negative) confirm the trend shift, then sellers are fully taking control.
Current Market Signs
GBP/USD fell sharply from 1.314, forming an M-shape pattern that often signals trend exhaustion.
If price fails to bounce near 1.3050, the likelihood of a full reversal increases.
Shorter timeframe indicators (like RSI and MACD) are showing slowing momentum, which reinforces the case for further downside.
My Verdict & Trade Decision
I’ve decided that this is looking more like a near-term reversal rather than just a pullback. Since price keeps failing to reclaim 1.3050, the bearish pressure remains strong. If we break below 1.2990, I expect a deeper decline into a full downtrend shift.
Final Trading Action
Closing my trade: Given everything I’m seeing, I’m closing my current long trade now to lock in profits and avoid further downside risk.
Future trade setup: If price rejects 1.3050 and starts rebounding, I’d consider re-entering long. However, if GBP/USD closes below 1.2990, I’ll switch to a short trade, targeting further downside.
Happy Friday!
Pullback vs. Reversal: What I’m Looking For
Pullback Characteristics: A pullback is typically a short-lived dip before the trend resumes. If GBP/USD stabilizes around 1.3030–1.3050 and then rebounds, it would confirm that buyers are still in control and the overall bullish trend is intact. Moving averages (like EMA and KAMA) should continue to slope upward in that scenario.
Reversal Characteristics: A full reversal happens when price breaks major support levels (like 1.2990) and shows bearish confirmation—things like a bearish engulfing candle, lower highs/lows, and negative momentum signals. If key indicators (like RSI dropping below 30 and MACD turning negative) confirm the trend shift, then sellers are fully taking control.
Current Market Signs
GBP/USD fell sharply from 1.314, forming an M-shape pattern that often signals trend exhaustion.
If price fails to bounce near 1.3050, the likelihood of a full reversal increases.
Shorter timeframe indicators (like RSI and MACD) are showing slowing momentum, which reinforces the case for further downside.
My Verdict & Trade Decision
I’ve decided that this is looking more like a near-term reversal rather than just a pullback. Since price keeps failing to reclaim 1.3050, the bearish pressure remains strong. If we break below 1.2990, I expect a deeper decline into a full downtrend shift.
Final Trading Action
Closing my trade: Given everything I’m seeing, I’m closing my current long trade now to lock in profits and avoid further downside risk.
Future trade setup: If price rejects 1.3050 and starts rebounding, I’d consider re-entering long. However, if GBP/USD closes below 1.2990, I’ll switch to a short trade, targeting further downside.
Happy Friday!
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.