Hello my fellow traders. It has been some time since I have done technical analysis for you. I would like to begin by taking a look at the GBP/USD on a daily chart. The reason we begin with a daily chart is because I like determining the trend on a longer time frame first. We could have initiated with a weekly chart, however because of this pairs tight ranging the weekly chart provides little information apart from the fact that the trend is ranging.
What is the first thing on the daily chart that pops out to you? Other than my commentary of course 
The first thing that I noticed when looking at the GBP/USD chart was the immense daily bearish candle! I returned home from lunch yesterday and could hardly believe the USD was on such a tare! 150 pip candle! I was astounded at the movement. Now after that you will take note of the trend line. I find it very interesting that price closed for the week right at this trend line. There is a potential for it to bounce. However, we must be cautious because of the strong bearish momentum. I would not be surprised to see it drop further to test support at 1.5800 this is also a key psychological level. You can read about a few of the top psychological factors in my article Top 3 Psychological Factors. Although price is bearish I am not confident that it will break 1.5800. I will be looking for a long entry around this price point. If we do get a bounce I will most likely be targeting the 1.6000 level. This level has proven difficulty to break. It did break it recently and came back down. I personally would be satisfied with targeting 150-200 pips.
Secondly let us take a look at the 4H chart. We see similarities to the daily just more defined. That is one crazy 4H bearish candle. We also see that it is resting on the trend line. This is a nice trend line, however, the volume and strength of that bearish 4H candle does worry me a bit and makes me belive that this trend line will hold little value. However, it is something to take into consideration. I do believe that if/when it does break through this trend line the 1.58000 level will be tested. If so, we need to watch for a bounce or break. A bounce could potentially send it up to 1.5983, 1.6, or even up to 1.6060 if this bottom channel at 1.5800 holds. Although with a strong bearish candle like that it is simply speculation. Yet, at the very least the 1.5800 should give it some trouble. As stated above I will be looking for a bounce to go long.
This could be a very interesting week ahead. Although this is technical analysis and you may be a technical trader let us not forget the fundamentals. They play a key role in the market. It is unwise to Ignore news that may move the market. I find myself many times doing excellent technical analysis and the news throws off my trade. It really irritates me when this happens. I typically check my calendar once a day to to find out what news is going on and what the news is for the next day ahead. It is always wise to be informed.
Please leave a comment! Thanks for reading!