Welcome back to our weekly market analysis. We are going to analyze GBPUSD on the weekly timeframe. The pair has been on a decisive uptrend looking left of our chart. Price topped with the formation of a double top that formed a new bear market. Bears took over up until mid-last year where the market has been on a range that is depicted by our support and resistance levels. Last week’s candle closed bullish but with a significant upper shadow signifying selling pressure. Additionally price did not close above the resistance level. The current candlestick is an engulfing at our resistance zone.
Sellers show an intention of moving the price further down as buyers were exhausted this week. Just to be sure, we have to wait for further price action, which can be observed on the lower timeframes of the daily or 4 hour for a confirmation of the bear power and entry.
Once again we see another ranging market on the weekly timeframe. Price has been trading between our two levels again. Even though price has been ranging, kindly note that this is a weekly range and you can still get significant home runs from this range. The latest leg on this chart is a downtrend in the form of a descending channel. The current candlestick is also an engulfing, opening above and closing below the previous candlestick. Moreover it occurred at the upper boundary of the descending channel.
We might as well call this week, the week of the bearish engulfings. It is safe to say bears have regained control of the market from the recent short-lived rally. The bear market may persist up to the support level which coincides with the lower boundary of the channel. Additional price action will affirm this speculation, therefore be on the lookout.