Technical Market Outlook:

The GBP/USD pair bounce was capped at 1.2447 and since then the market has been moving in a narrow trading range below the local trend line. The level of 1.2262 will now act as a technical support and the bottom for the corrective wave W, but it might be violated if the Bank of England interest rate decision will trigger high volatility trading conditions. The overall corrective cycle is now evolving onto more complex and time consuming WXY pattern, where waves W and Y are done and wave Y is still missing. The momentum is weak and negative, which supports the short-term bearish outlook for GBP. In a case of a further downward extension, the next technical support is seen at the level of 1.2171 and 1.2210 (H4 time frame 100 MA).

Weekly Pivot Points:

WR3 - 1.24596

WR2 - 1.24223

WR1 - 1.24021

Weekly Pivot - 1.23850

WS1 - 1.23648

WS2 - 1.23477

WS3 - 1.23104

Trading Outlook:

The bulls are temporary in control of the market and the next target for bulls is 61% Fibonacci retracement level (1.2760). So far the level of 1.2443 was too strong resistance to break through, so a potential Double Top price pattern might be in play. The confirmation of the pattern comes with the level of 1.2089 breakout with a potential target at the level of 1.1840.