Weekly Technical – GBP/USD – June 13th, 2022

The British pound failed to sustain gains versus the US dollar after bouncing off the 13-month bottom, tested a weekly resistance range in the 1.26 figure, reversed, and printed two weekly candlesticks in the red. On top of that, the selling pressure continued on Monday, resulting in almost 2.5% losses after the recent peak. Given the nature of the recent bullish retracement, and the pace of the decline, we suggest that the downtrend of the GBP/USD currency pair is going to accelerate in the short-term perspective.        

The Ichimoku Cloud indicator did not show any signs of a bullish reversal as the leading span remained bearish and both Conversion and Base lines kept heading south. The rate tested the Ichimoku Conversion line from below, and failed to breach it, delivering a strong sell-signal two weeks ago. The recent price action confirmed the bearish sentiment, and the pair is about to retest the 13-month bottom, a breakout of which should lead to further losses of the exchange rate.           

The ADX and DI indicator has the mainline at extremely high values compared to previous peaks, which is a sign of strong momentum and higher volatility. The red line is well above the green one, and the surplus between them is increasing, which shows the absence of buyers at this stage. The Relative Strength Index is about to enter the oversold zone again.        

Another weekly chart setup below shows that the Williams Alligator indicator has a similar continuation pattern to the Ichimoku Cloud. The lines are spreaded, and headed south, while the bottom line is showing the nearest resistance level.       

The MACD indicator has a red histogram increasing the neagavit value of its bars, and both lines do not show any sign of a potential bullish crossover. The Awesome Oscillator is negative but its bars are in the green, still pointing to an increase of the bullish momentum. The upcoming week should change this if closed with fresh lows though. Best wishes traders!!