GBP/USD respects channel pattern

Source: Dukascopy Bank SA

The GBP/USD continues to decline in the channel down pattern, as the rate encountered the upper trend line of the channel at the start of the week's trading, before reaching new low levels. Note that the trend line was strengthened by the 100-hour simple moving average and the weekly simple pivot point at 1.2885.

By mid-Monday's trading hours, the rate had reached the support of the 1.2800/1.2820 range. The range provided enough support for the pair to recover. However, almost immediately resistance was encountered in the 1.2845/1.2855 range. It has resulted in the pair fluctuating between the two ranges.

A breaking of the 1.2845/1.2855 zone is expected to result in the GBP/USD testing the resistance of the 50 and 100-hour simple moving averages and the upper trend line of the channel down pattern. If the rate reaches above these levels, it is set to face the weekly simple pivot point at 1.2885, before reaching the 1.2900 mark.

However, in the case of a resumption of the decline and a move below 1.2800, support might be found in the weekly S2 simple pivot point at 1.2791 and the lower trend line of the channel pattern. Further below, note the 1.2740 level and the weekly S3 at 1.2733. Although, the pivot points might be ignored by the GBP/USD, as the S1 pivot point did not impact the rate during the first half of Monday.
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