GBPUSD Tags Major Trend Support

GBPUSD Technical Outlook:

• The cable could bounce on the trend line from 2016 to today
• At the very least, increased volatility seems to be announcing

Check DailyFX Trading Guides page devoted to medium-term forecasts, educational content for all levels of experience, etc.

GBPUSD could rebound on the current 2016 trend line

Last week, GBPUSD sales increased, bringing cable back to a significant long-term trend line. The trend line started with a bang as it goes back to the October 2016 Flash-crash of Sterling. This line has another pair of big inflection points with the connection of the January '17 and December '18 troughs.

What makes the line even stronger is that despite being two and a half years old, you can connect the low points to the daily period. There was a brief line break in January, when we had another flash crash situation (YEN, GBP, AUD), but the other low points come together to create a strong support line. This does not mean that GBPUSD will reach its lowest level, but it also means that traders need to be on extreme alert for at least increased volatility or even a big rebound.

If we do not see a significant reversal (we had some volatility on Friday) on the trend line, more polls and a potential breakout could lead to the January 23 down to 12373., a support over the support could quickly see the first level of swing reached at the summit of 12748 hit last week, followed by the summit of the day on May 21 at 12813.

Check Page Sentiment of the client IG discover how positioning changes in key markets could signal the next price movement.

GBPUSD daily chart (Price action on main T-lines)

GBPUSD weekly chart (2016-Present trend line)

Useful Resources for Forex Traders

Whether you are a beginner or experienced trader, we have many resources to help you. tracking indicator feeling of tradersquarterly business forecasts, badytic and educational webinars held every day, commercial guides to help you improve business performance, and one especially for those who are new on the forex.

— Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at@ PaulRobinsonFX