Overview :
The GBP/USD pair has faced strong resistances at the levels of 1.2137 because support had become resistance last week.
The GBP/USD pair has dropped sharply from the level of 1.2169 towards 1.2023. Now, the price is set at 1.2106 to act as a daily pivot point (around 1.2096).
Also, the level of 1.2096 represents a weekly pivot point for that it is acting as major resistance/support this week.
Amid the previous events, the pair is still in a downtrend, because the GBP/USD pair is trading in a bearish trend from the new resistance line of 1.2137 towards the first support level at 1.2057 so as to test it.
Therefore, the strong resistance has been already formed at the level of 1.2137 and the pair is likely to try to approach it in order to test it again.
However, if the pair fails to pass through the level of 1.2137, the market will indicate a bearish opportunity below the new strong resistance level of 1.2137 (the level of 1.2137 coincides with a ratio of 78% Fibonacci).
Moreover, the RSI starts signaling a downward trend, as the trend is still showing strength above the moving average (100) and (50).
Thus, the market is indicating a bearish opportunity below 1.2137 so it will be good to sell at 1.2137 with the first target of 1.2069. It will also call for a downtrend in order to continue towards 1.2023. The daily strong support is seen at 1.2023.
However, the stop loss should always be taken into account, for that it will be reasonable to set your stop loss at the level of 1.2190.
The material has been provided by InstaForex Company - www.instaforex.com