GBP/USD produced a bearish engulfing candle in the daily chart yesterday. The price made a big bullish move and consolidated for a while. It produced a bullish Marubozu candle, but yesterday’s daily candle engulfed the candle closing below it. Major intraday charts suggest that the price may head towards the South and make new lower lows. Let us now have a look at three vital charts.
Chart 1 GBP/USD Daily Chart
The chart shows that the price after being bullish for a long time had a rejection at 1.32650 and produced a bearish engulfing candle. The chart shows that the level of 1.30000 may work as a level of support and hold the price. However, if it gets breached, the sellers in the daily chart may go short in the pair and drive the price towards the South further. The price may find its support around 1.28000. On the contrary, if the chart ends up producing a bullish engulfing candle closing above 1.32650, the chart may get bullish again and find its next resistance around 1.35000.
Chart 2 GBP/USD H4 Chart
The H4 chart shows that the price made a strong bearish move and had a bounce at 1.30900. It produced a bullish inside bar followed by a bearish inside bar. However, the price breached consolidation support. The pair is trading below the level. Thus, the sellers may go short in the pair upon having bullish correction in the minor intraday charts. The price may find its next support around 1.30000. In case of a bullish breakout at 1.31185, the price may make a sluggish bullish move and find its resistance around 1.31850.
Chart 3 GBP/USD H1 Chart
The chart shows that the price after being very bearish had a bounce at the level of 1.30900. It produced a bullish engulfing candle followed by another bullish candle. The second bullish candle closed within 1.31200. The level produced a bearish Marubozu candle and drove the price towards the South. As of writing, the pair is trading below the last swing low. However, it has not made an explicit breakout yet. The sellers may wait for the price to consolidate and produce a bearish reversal candle to go short in the pair. The price may find its next support around 1.30280. If the price makes a bullish reversal from here, the buyers are to wait for the price to make a bullish breakout at 1.31200 to go long in the pair.
The H4 and the H1 chart are bearish biased. The daily chart is to make a breakout to attract the sellers. However, the bearish engulfing candle may make the pair bearish today, which may make the pair remain bearish in the coming days as well.