Bears take control in long squeeze

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<li><strong>GBP/USD bears eye a 50% mean reversion if not the 61.8%ratio. </strong></li>
<li><strong>The 4-hour W-formation neckline support has a confluence with the 78.6% Fibonacci. </strong></li>
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<p>GBP/USD ended at around 1.2840 on Friday after reaching its lowest level since July 6 while investors remain concerned that the hawks will continue to circle over the Federal Reserve following the release of stronger-than-expected second-quarter Gross Domestic Product data from the US.</p>
<p>Meanwhile, in the UK, weaker-than-expected <a href="https://www.fxstreet.com/economic-calendar/united-states">PMI</a> data and lesser inflation are pointing towards a less hawkish outcome at the Bank of England next week. Markets still anticipate a 25 bps hike at the central bank’s August meeting but money markets see a peak of 5.75% in November, lower than prior projections. This leaves a bearish focus on the charts for GBP/USD and bears are already moving in at the end of the week:</p>
<h2>GBP/USD daily charts</h2>
<p><a href="https://editorial.fxstreet.com/miscelaneous/GBPUSD_2023-07-28_15-05-07-638261756114035006.png" target="_blank" rel="noopener"><img decoding="async" alt="" src="https://editorial.fxstreet.com/miscelaneous/GBPUSD_2023-07-28_15-05-07-638261756114035006.png" style="width: 600px; height: 317px;" /></a></p>
<p><a href="https://editorial.fxstreet.com/miscelaneous/GBPUSD_2023-07-28_15-07-29-638261756350520846.png" target="_blank" rel="noopener"><img decoding="async" alt="" src="https://editorial.fxstreet.com/miscelaneous/GBPUSD_2023-07-28_15-07-29-638261756350520846.png" style="width: 600px; height: 317px;" /></a></p>
<p><a href="https://editorial.fxstreet.com/miscelaneous/GBPUSD_2023-07-28_15-07-38-638261756579984414.png" target="_blank" rel="noopener"><img decoding="async" alt="" src="https://editorial.fxstreet.com/miscelaneous/GBPUSD_2023-07-28_15-07-38-638261756579984414.png" style="width: 600px; height: 317px;" /></a></p>
<p>We could be somewhat premature in the sell-off but that is not to say that we do not have any downside in play for the initial balance next week:</p>
<h3>GBP/USD H4 chart</h3>
<p><a href="https://editorial.fxstreet.com/miscelaneous/GBPUSD_2023-07-28_15-20-49-638261760641994660.png" target="_blank" rel="noopener"><img decoding="async" alt="" src="https://editorial.fxstreet.com/miscelaneous/GBPUSD_2023-07-28_15-20-49-638261760641994660.png" style="width: 600px; height: 317px;" /></a></p>
<p>The W-formation is compelling and could be a pull on the price towards last week’s lows that meets a 50% mean reversion if not the 61.8%ratio. The neckline support has a confluence with the 78.6% Fibonacci. </p>
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<br /><a href="https://www.fxstreet.com/news/gbp-usd-price-analysis-bears-take-control-in-long-squeeze-202307282124">Source link </a></p><p>The post <a href="https://forextraderhub.com/bears-take-control-in-long-squeeze.html">Bears take control in long squeeze</a> first appeared on <a href="https://forextraderhub.com">Forex Trader Hub</a>.</p>