GBP/USD Forex Signal: Double Top Chart Pattern Forms

Bearish view

 Bullish view

 The GBP/USD pair pierced the important resistance point at 1.3000 for the first time in over a month as the greenback sell-off continued. It was trading at 1.3030, much higher than this month’s low of 1.2665. Strong pound, weak US dollarThe GBP/USD pair continued rising mostly because of the strong British pound and the weaker US dollar. The closely-watched British pound index rose to a high of 130, its highest level since July 2023. This index weighs the performance of the greenback against a basket of currencies like the US dollar, euro, and Swiss franc.The pair also rose as the US dollar index slipped for four straight days and moved to the key support at $101.4, its lowest level since January 2nd. It has moved from the year-to-date high of $106.53.This price action happened in a low-data environment. Instead, traders are watching the upcoming Federal Reserve minutes, which will come out on Wednesday. These minutes will come a day ahead of the Jackson Hole Symposium.Economists expect the bank to start cutting interest rates in its September meeting. Recent economic data showed that the US inflation dropped for the third consecutive meeting in July while the unemployment rate continued rising.Therefore, a gradual period of rate cuts will help the Fed to stabilize the labor market without stimulating too much inflation.The Bank of England, on the other hand, has already slashed interest rates by 0.25% and analysts expect it to deliver at least two more cuts this year. GBP/USD technical analysisThe GBP/USD exchange rate has been in a strong uptrend after bottoming at 1.2665 earlier this month as concerns about the Japanese yen rose.It has flipped the important resistance level at 1.2892, its highest level on March 8. The pair has also remained above the ascending trendline that links its lowest swings since April 22nd.It has also moved above the 50-day moving average while the Money Flow Index (MFI) has moved above the neutral point at 50.The risk is that it has now formed a double-top pattern at 1.3045. In most periods, this is one of the most bearish signs. Therefore, for the bull run to continue, bulls need to move above the double-top part. If this happens, it will next retest the resistance level at 1.3100. The alternative scenario is where it has a reversal on profit-taking.More By This Author:BTC/USD Forex Signal: Stuck In A Range But A Breakout Likely EUR/USD Forex Signal: Slowly Approaching Key Resistance At 1.1140BTC/USD Forex Signal: Inverse Head & Shoulders Forms