In the previous analysis we saw the price reaching 1.30968 as a potential entry for the bears.
The price moved from 1.29795 support upwards and reached 1.30968 and then continued moving down. The price had a strong bearish move where it moved 200 pips in one day and then over 100 pips on the second day.
That sell-off reached 1.27587 which is reasonable support and where the price will stall for a while. Currently, the price is in the downtrend channel and it respects support and resistance trendlines.
We have 1.26089 as the next support close to the downtrend channel support line, which forms a confluence of support. That is the target the price is now heading to, but we could see the price reverse upwards before that.
We have 1.28803 as a first resistance for the price and there is a downtrend channel resistance line that together forms a confluence of resistance.
The price is in the downtrend and there is no sign of losing strength. So we should look for sell entries.
If the price manages to close the day above 1.29795 it will be the first sign of bulls' recovery, but to reach that level the price needs to move upwards more than 300 pips.
Even if that is not so hard for the GBPUSD currency pair in the current market overview it will not be easy.
Having the price above 1.30968 would change the market sentiment from bearish to bullish. Until then it is good to trade with the trend and that is to look for selling opportunities.
Frano is an engineer, author, forex trader and the owner of a blog where he teaches forex courses for beginners. Frano created a website on how to trade forex to share his knowledge, market analysis which is also published on forexFactory.com, investing.com and many other trading related websites.