As today’s GBP/USD chart shows, the pound sterling fell by nearly 1% against the US dollar in just one hour, forming an exceptionally long bearish candle.
The sharp drop was driven by concerns over public finances and a broad sell-off in the bond market. According to Reuters, the yield on UK 30-year government bonds hit 5.69% – the highest level since May 1998 – highlighting the elevated risk premium.
Technical analysis of GBP/USD Price Chart
When analysing the pair’s movements in July, we questioned GBP/USD’s ability to sustain growth. Since then, the chart has developed a series of lower highs and lower lows, forming a bearish A→B→C→D structure.
At the end of August, the pair consolidated between the Support and Resistance lines shown on the chart.
Factors reinforcing the bearish context and confirming earlier doubts include:
→ a failed bullish breakout attempt (marked with a red arrow);
→ Liquidity Grab patterns above previous highs (marked with black arrows).
What could happen next?
Today’s decline highlights a strong resistance zone formed by:
→ the breakout level of August’s support around 1.3462;
→ the upper boundary of the descending channel.
Bulls may find some support at the psychological 1.3400 level. However, if pressure increases (particularly if new bearish fundamental drivers emerge), GBP/USD could slide towards the median of the descending channel.
