GBPUSD: Technical Outlook for May 16-20

Sophia Todorova has a background in teaching and psychology, and as such relishes the idea of assisting new traders on their journey to Forex trading success. Technical Analysis is her passion. The charts speak, and she listens.

 

Since being rejected at 1.6740s weekly resistance and closing back inside the daily range resistance line, Gbpusd retested that line (also broken neckline) at 1.6517 before baking a beeline for the inner trendline, where it settled momentarily before also breaching that support (See daily chart below). At Friday’s close, the pair was already trading below the 1.6230 trendline. For the coming week, I will be watching for an opportunity to short the pair, perhaps after a retest of the broken inner trendline. My first target will be the outer trendline on the daily chart at 1.6040. This trendline also converges with the weekly support line at that level. Further to the downside lies the daily range support line (in purple) at the 1.5920 area. Please note, however, that since 1.6040 represents weekly support, that level might be difficult to breach at first. The real struggle will, in my opinion, be at 1.5920 where the bears have tried and failed to drag the pair lower, ultimately resulting in a breach of the weekly trendline. That line is also the barrier which stands between the weekly staying within the buy zone which it occupied so briefly, and the sell zone which could enbolden the bears in their attempt to pull it lower.

The above is only my personal viewpoint from a technical analysis perspective, and although I do not foresee the bulls making a significant comeback for the medium term, the market is never wrong. I will trade my plan if the above scenario plays out, but the market always needs to be respected, and I will change my trading strategy in an instant if  necessary. Please share your own views on how you anticipate trading Gbpusd. I’d like to consider other possibilities. Enjoy the rest of your weekend, and I wish you profitable trading for the coming week!

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