On the 1-hour time frame, the GBPUSD currency pair reveals a potential correction after failing to breach the upper Bollinger Bands, which is acting as a dynamic resistance. The notable price increase observed in the recent sessions is beginning to lose its momentum, as evidenced by selling pressure that is surfacing at the upper levels. This rejection at the upper Bollinger boundary serves as an early indication that the buyers may be running out of steam, suggesting that the market could be gearing up for a downward move in the short term.
This weakening signal is further supported by the Commodity Channel Index (CCI), which currently occupies the overbought region, indicating a state that is vulnerable to profit-taking actions. Should the price fail to maintain its position above the resistance area and start forming a reversal candle, the likelihood of a correction toward the middle line of the Bollinger Bands becomes significantly heightened.
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On the 15-minute time frame, GBPUSD has formed a technical pattern known as a double top, signaling a potential reversal after failing to surpass the same resistance level on two occasions. This formation suggests that buying pressure is beginning to wane, while sellers are gradually gaining control. If the neckline of this pattern is successfully broken, further declines are likely to test the support level at 1.34125.
Technical Reference: sell if below 1.34900
Potential Stop Loss 1: 1.34765
Potential Stop Loss 2: 1.34900
Potential Take Profit 1: 1.34225
Potential Take Profit 2: 1.34125
