GBP/USD Faces Reversal Risk After 1.3600 Rejection
Muhammad Faraz 
GBPUSD Faces Reversal Risk After 1.3600 Rejection
The GBP/USD currency pair has encountered notable selling pressure after testing a major resistance zone near the 1.3600 level. This area has acted as a significant turning point in past price action, and early signs suggest that the market may be gearing up for a corrective move lower.
Recent Price Action
Following a strong rally throughout early August, GBP/USD climbed steadily from the 1.3100 area to reach a peak just below the 1.3600 mark. This upward move was supported by persistent dollar softness and improved market risk sentiment. However, the latest price behavior indicates that the bullish momentum may be stalling. On the 4-hour chart, repeated rejections around the resistance zone suggest heavy selling activity from institutional traders and large market participants.
Technical Structure and Resistance Zone
The major resistance zone between 1.3580 and 1.3620 is reinforced by previous swing highs, overlapping Fibonacci retracement levels from the June–July downtrend, and high-volume price clusters. Historically, this level has triggered reversals, making it a key battleground between bulls and bears. Current volume data reveals a decline in buying activity as price approaches resistance, a classic warning sign that upward momentum is losing steam.
Downside Scenarios and Price Targets
If GBP/USD fails to break above the resistance zone, technical indicators point toward a corrective move. The first target is 1.3480, a minor support level formed by recent consolidation and previous intraday lows. A break below this support would likely open the door to 1.3400, an area that has served as a critical pivot point in past trading sessions.
Should bearish pressure accelerate, the final target for the current setup lies at 1.3310, which falls within a major demand zone. This level is of particular interest to buyers and could trigger a rebound if tested.
Short-Term Bias and Risk Management
As long as GBP/USD remains capped below 1.3600, the short-term bias favors sellers. Traders may look for confirmation via bearish candlestick patterns, momentum divergence, or breakdowns below intraday supports. Invalidation of the bearish outlook would occur if the pair closes decisively above 1.3620, which could then extend gains toward the 1.3700 region.
From a risk management perspective, traders considering short positions should keep stops above the resistance zone and size positions appropriately to manage volatility.
Conclusion
GBP/USD faces a critical technical juncture after being rejected at the 1.3600 resistance zone. The weakening bullish momentum, coupled with clear downside targets at 1.3480, 1.3400, and 1.3310, points toward a corrective phase in the near term. Unless buyers can force a decisive breakout above 1.3620, the path of least resistance remains to the downside, favoring short setups for traders with disciplined risk management.
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