GBP/USD 4H Chart: Broadening Falling Wedge

Source: Dukascopy Bank SA
© Dukascopy Bank SA
The overall outlook for the GBP/USD pair is bullish, even though technical studies in the long-term are unable to confirm this. The pair formed a falling wedge pattern since the beginning of 2016, which mostly implies a breakout to the upside. However, because the wedge is broadening, there is still room for a decline, just as technical indicators suggest. The first target is the March 16 low at 1.4051, which is somewhat reinforced by the monthly S1. A breach of this area is likely to set the pair on a bearish path towards the monthly S2, closer to the wedge's support line, after which a recovery towards the pattern's resistance line is to take place. The Sterling is somewhat overbought, as 67% of all open positions are long.
© Dukascopy Bank SA
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