Technical analysis, and in particular the Range identifier Indicator, suggests a possible continuation to the downside is on the cards for GBPUSD.
The Range Identifier is a technical tool that highlights price ranges of an asset. Technical analysts will commonly use this indicator to determine price breakouts. Similar to the Darvas Box indicator, the Range Identifier automatically populates charts with boxes that highlight the lows and highs of a price range over a limited period of time.
The highs and lows inside the Range Indicator boxes can be considered as support and resistance levels, and thus, can be used to identify price breakouts. The price that breaks and closes above or below those areas is said to be a breakout. A breakout indicates a potential continuation of the current trend or possible price reversal. Simple trend indicators, such as moving averages, can help identify the current market bias in this regard.
With the help of the Range Identifier in analyzing the GBPUSD daily chart, we can see the price is currently inside a box range between 1.2030 high and 1.1860 lows. This is quite a tight range as the pair has barely budged from 1.1880 in the past three trading days.
The pairs distance to the high of the latest box range is considerable, and a breakout to the downside is possibly looking more likely. This idea is supported by the 200 EMA period as the price hovers below this moving average line, indicating a strong downtrend.
If the price breaks out to the downside, we might see the GBPUSD heading towards the 1.1650 weekly support area.