Chart the Market (16/05/2025)

GBPUSD, H4: 

The British pound rebounded from a recent low of 1.3162, staging a strong recovery that positions the pair to retest its previous highs. Despite a brief pullback, the pair has found firm support, with price action now aligning with the formation of an inverse head-and-shoulders pattern — a classic bullish reversal signal.

Momentum indicators reinforce the constructive outlook. The Relative Strength Index (RSI) continues to climb, while the MACD has crossed above the zero line, indicating strengthening bullish momentum. A sustained break above the neckline resistance could confirm the pattern and open the door for further upside in the near term.

Resistance Levels: 1.3420, 1.3535

Support Levels: 1.3295, 1.3162

USDCHF, H4

The USDCHF briefly broke above its previous resistance at the 0.3820 level, signaling a bullish breakout. However, the pair has since lost upward momentum and is now retreating toward this pivotal level, which also aligns with its long-term ascending trendline — a confluence zone that may act as a critical support.

Traders are watching closely for a potential technical rebound at this juncture. A successful hold above 0.3820 could reinforce the pair’s bullish structure. However, a decisive break below this level would invalidate the breakout and may trigger further downside pressure.

Momentum indicators point to waning bullish strength. The RSI is trending lower, while the MACD is on the verge of crossing below the zero line — both suggesting that upside momentum is fading.

Resistance Levels: 0.8526, 0.8700

Support Levels: 0.8130, 0.7900