GBPUSD | Descending Trendline Breakout & Bullish ConfluenceGBPUSD | Descending Trendline Breakout & Bullish Confluence
Fundamental View
GBPUSD is showing signs of strength after recovering from the 1.3500 support area. The broader currency market remains highly sensitive to central-bank expectations and inflation dynamics. The ECB raised rates by 25 basis points, reflecting persistent inflation pressures, while expectations surrounding further global rate adjustments continue to influence USD flows.
However, the ECB decision should be viewed as a broader FX-market catalyst rather than a direct GBPUSD driver. For GBPUSD, the relative outlook between the Bank of England and Federal Reserve remains more important.
Technical View
On the 1H chart, GBPUSD has reacted positively from the 1.3500 support/rejection zone.
Price is currently attempting to reclaim the Supertrend area around 1.3530, while the descending structure remains an important obstacle. A sustained break above 1.35395 could provide confirmation that buyers are gaining short-term control.
If price clears 1.35600 with strong momentum, the bullish continuation scenario could open the way toward 1.36001.
SMC View
From an SMC perspective, the 1.3500 region is acting as a demand/support area where sellers previously failed to maintain downside pressure.
The recent reaction suggests that sell-side liquidity around the lows may have been absorbed. The key confirmation would be a break of the nearby resistance structure around 1.35395–1.35600.
A successful breakout could shift short-term market structure bullish and attract additional liquidity toward the 1.3600 area.
This Move Is Supported By
• Strong reaction from the 1.3500 support zone
• Recovery back toward the descending structure
• Potential short-term shift in momentum
• Buyers defending the recent lows
• A possible breakout above 1.35395–1.35600 resistance
Trading Scenario
Bullish Scenario:
If GBPUSD maintains the 1.3500 support and breaks above 1.35395, the next resistance comes around 1.35600.
A confirmed break and hold above 1.35600 could expose the 1.36001 target zone.
Bearish Invalidation Scenario:
If price fails to hold 1.3500 and produces a sustained bearish breakdown below this support, the bullish setup would weaken and the market could return toward lower liquidity zones.
Key Levels
Resistance: 1.35395
Major Resistance: 1.35600
Bullish Target 1: 1.35602
Bullish Target 2: 1.36001
Key Support: 1.35000
Bullish Invalidation: Sustained break below 1.35000
Professional Insights
The key area to watch is 1.35395–1.35600. This zone should determine whether the current recovery develops into a broader bullish continuation or simply becomes another rejection within the existing range.
For confirmation, I would look for a clean breakout, preferably followed by a retest that holds above resistance. That would provide stronger evidence of a structural shift rather than relying on a single intraday spike.
Risk Management
Avoid treating the 1.3500 support as an automatic entry level. Wait for price action confirmation and manage position size according to your individual risk tolerance.
A sustained move below 1.3500 would weaken the bullish thesis and should be considered when reassessing the setup.
Disclaimer
This analysis is for educational purposes only and does not constitute financial advice. Market conditions can change quickly, and all trading decisions should be based on your own research and risk management. ECB Interest Rate Decision⏱️ Reading time: 2 minutes
(Trading setup with Entry level, SL and TP)
The ECB rate hike alone may not be enough to push OANDA:EURUSD higher. Price has already spent significant time below the marked resistance zone around 1.1670–1.1700 , while the previous rejection from this area created a Far Retest that worked as expected. The current structure, however, is different: OANDA:EURUSD is approaching the same resistance again, and repeated testing can gradually weaken the level.
The more likely scenario is a continuation:
📌 Potential trade setup:
Priority direction: BUY
Entry zone: 1.16546
Target: 1.17012
Stop: 1.16313
A sustained move through 1.1700 would strengthen the bullish structure and could open the way toward the next major resistance around 1.1780–1.1800 . The key point is that the previous Far Retest already produced a reaction, but another test after a prolonged consolidation can have a different outcome. I covered the broader ECB/Fed expectations and what can help anticipate the Fed’s next rate move in my previous publication, “What Can Help You Anticipate the Fed’s Next Rate Move?”. Check out Related publications.
The alternative scenario is a rejection from 1.1670–1.1700 followed by a return toward the marked support around 1.1580–1.1600 . A loss of that area would shift attention to the lower support near 1.1500–1.1520 . For now, the bullish scenario remains the one I consider more likely, but confirmation is still needed.
🎓 The logic behind this market view is explained in more detail in my education material, which can be found in Related publications: “Near and Far Retests: What Every Trader Should Know”
If this post was useful, feel free to boost 🚀 it and share your view in the comments 💬
⚠️ Disclaimer: This is a public market view based on current analysis; market conditions and price direction are subject to change based on news factors and volatility. This is not financial advice. Please do your own research and manage your risk.
Long
