GBP/USD Near Decision Zone at Lower Channel Support

What to Know

• GBP/USD remains inside a rising channel, holding firm near key support after retreating from the July high at 1.3789.
• A potential double top may be forming, but confirmation requires a daily close below the neckline at 1.3324.
• On the weekly chart, the third touch of channel support reinforces trend structure and buyer activity.
• The daily timeframe suggests a developing ABCD bullish pattern, with resistance near 1.3572 aligning with the 61.8% Fibonacci retracement.
• A break below 1.3324 could trigger a bearish move toward 1.3167 and 1.3142, while a close above 1.3537 would confirm renewed bullish momentum.

Rising Channel Holds After July Trend High

The GBP/USD pair has been consolidating within a small rising channel following its first notable pullback from the trend high of 1.3789 in early July. That high marked completion of an 88.6% Fibonacci retracement, often viewed as the upper limit in retracement analysis. The subsequent decline found support near 1.3142, aligning with the 38.2% Fibonacci retracement, reinforcing the reliability of Fibonacci relationships in the current market structure.

These levels not only define the broader retracement range but also highlight the ongoing interplay between measured pullbacks and continuation attempts. The current rising channel represents a period of balance within that dynamic — with short-term momentum still constructive but increasingly sensitive to broader dollar movements and technical thresholds.

Potential Double Top 

The rally off the 38.2% retracement produced a lower swing high at 1.3727, forming the second peak of what may become a double top bearish pattern. Still, this structure remains incomplete and invalid until the neckline—currently near 1.3324—is broken on a daily close. Until then, the pattern remains a potential scenario rather than an active signal.

Within this evolving formation, the rising channel has contained price movement, creating overlapping support and resistance zones that help define near-term decision points. The longer GBP/USD stays within this channel, the more compression builds, suggesting an eventual breakout move could carry greater directional momentum once triggered.

Weekly Chart Reinforces Structural Support

On the weekly timeframe, price has moved sideways for three consecutive weeks, confirming the lower channel line as a viable support level on a third touch this week. Such confirmation strengthens the trend structure and implies that, while upside momentum is subdued, buyers remain active at the lower boundary. Sustained defense of this level could pave the way for another advance toward the upper channel line, potentially extending the broader medium-term uptrend.

Daily Structure Suggests Rising ABCD Potential

Zooming in to the daily chart, this week’s low has created a potential higher swing low, supported by the rising trendline. If maintained, that low may evolve into a developing ABCD pattern, a common measured-move structure that often forecasts continuation within a trend.

Price symmetry between the two measured legs projects a potential completion zone near 1.3572, where the ABCD target aligns with the 61.8% Fibonacci retracement. The convergence of two technical indicators at this level could act as a magnet for price, as such alignments often attract liquidity and trading attention. At the same time, that convergence implies a formidable resistance zone, requiring strong buying momentum to break decisively.

Downside Risks Increase on Channel Break

If GBP/USD fails to hold the rising structure, a decisive drop below the lower channel line would signal fading momentum. A further decline beneath the interim swing low at 1.3324 would confirm a bearish breakdown, potentially opening the way to deeper retracement levels.

The first downside target would be the 200-Day moving average, currently near 1.3167, followed closely by the August 1 swing low at 1.3142. These overlapping support levels may attract short-term buying interest, but a sustained break below them would confirm renewed bearish control and shift the medium-term bias downward.

Key Resistance Levels for Upside Continuation

For the bulls, initial resistance sits at this week’s high near 1.3490, followed by last week’s high at 1.3528. A breakout through those levels would suggest short-term momentum is turning positive and raise the probability of testing the range top at 1.3537.

A daily close above 1.3537 would confirm a breakout from the three-week consolidation range and strengthen prospects for a rally toward 1.3572, and possibly higher toward the upper boundary of the channel.

 

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