Currency pair Pound Dollar GBP/USD completes the trading week near the area of 1.2559. The pair continues to move as part of the correction and the formation of a large «Head and Shoulders» reversal pattern. Moving averages indicate a bearish trend. Prices are testing the areas between the signal lines, which indicates pressure from sellers and a potential continuation of the decline in the British Pound against the US Dollar at current levels. At this point, we should expect an attempt to continue the development of an upward correction and test the resistance area near the level of 1.2685. Further, the rebound and the beginning of the fall in the Pound/Dollar quotes to the area below the level of 1.1715.
GBP/USD Forecast and Analysis July 20 — 24, 2020
An additional signal in favor of the fall of the British Pound will be a test of the trend line on the relative strength index (RSI). The second signal will be the formation of the «Head and Shoulders» reversal pattern. Cancellation of the option to drop the GBP/USD pair in the current trading week July 20 — 24, 2020 will be a strong growth and a breakdown of the 1.3045 area. This will indicate a breakdown of the resistance area and continued growth to the area above the level of 1.3535. A confirmation of the fall in the GBP/USD currency will be the breakdown of the support area and the closing of prices below the level of 1.2005, this will indicate the completion of the formation of the «Head and Shoulders» reversal pattern.
Among the important news from the UK, which may have an impact on the Pound/Dollar rate, it is worth highlighting: United Kingdom Retail Sales m/m.
GBP/USD Forecast and Analysis July 20 — 24, 2020 implies an attempt to test the resistance level near the 1.2685 area. Where can we expect the pair to continue falling with a target below the 1.1715 area. An additional signal in favor of the fall will be a test of the trend line on the relative strength index (RSI). Cancellation of the option to reduce the pair Pound/Dollar will be a strong growth and a breakdown of the level of 1.3045. In this case, we should expect the pair to continue to grow with a potential target above the level of 1.3535.