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GBP/USD Working out a Bullish Divergence

The GBP/USD is developing a bullish divergence in the daily chart between price and the RSI. This is forming after price broke below 3 different rising trendlines, the 100-, and 50-day SMAs, so the fact that the RSI is even in the oversold area giving a bullish divergence signal is a sign that bears are in control in the medium-term, though a short-term consolidation could be due. 

(GBP/USD Daily Chart)

The 1H chart shows that the market is indeed working out that bullish divergence seen in the daily chart. It is consolidating in a flag pattern, which suggests there is further downside. But in the near-term, there could be some upside risk toward 1.68. As that happens, and as the 1H RSI approaches 60, we should anticipate a bearish attempt. If that bearish attempt breaks below the flag pattern, and the RSI dips back below 40, we can be looking at a bearish continuation that has downside toward the 1.6690-1.67 lows from May-June.

(GBP/USD 1H Chart)