- GBP/USD bears are in the market and eye a breakout to target H4 W-formation neckline.
- Bulls could still hold up the bears ate key structure support.
GBP/USD is offered on Monday, extending losses from Friday while the dollar index is finishing July down after a similar loss in June. However, the Greenback is rebounded from July lows that printed following below-forecast US core PCE that favoured the Fed being done with rate hikes. The following illustrates the prospects of a low close for the day on the charts:
GBP/USD weekly chart
GBP/USD is pressured below the prior week's lows but remains on the front side of the bullish trendline.
GBP/USD daily and H4 charts
On the daily chart, we are coiling on the front side of the bearish trend and tinkering on the edge of a bearish breakout.
The four-hour chart shows the bears moving from resistance and a 50% mean reversion level.
This leaves the W-formation's neckline vulnerable on a break below 1.2837.
With that being said, there is the risk of a correction into the hourly M-formation's neckline first.
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