“¢ Intraday positive momentum faces rejection at 50-hour SMA.
“¢ The prevalent USD selling bias does little to provide any bullish impetus.
“¢ Investors seemed reluctant to place bets ahead of UK PM May’s speech.
The GBP/USD pair struggled to build on its intraday positive momentum and quickly retreated over 40-pips from an intraday high level of 1.3182.
The pair rallied nearly 100-pips from sub-1.3100 level, or 200-hour SMA, and filled the weekly gap, triggered by negative Brexit headlines over the weekend. Bulls, however, failed to capitalize on the positive momentum and faced rejection near 50-hour SMA.
Even the prevalent US Dollar selling bias, which remained unabated following the disappointing release of US monthly retail sales data, also did little to provide any fresh bullish impetus and stall the pair slide back below the 1.3140 level.
Market participants now seemed reluctant to place any aggressive bets and preferred to wait on the sidelines ahead of the UK PM Theresa May’s unscheduled statement to the Commons on Brexit negotiations at approx. 1430 GMT.
Technical outlook
Mario Blascak, Chief Editor at FXStreet writes: “The technical oscillators are pointing upwards on the 1-hour chart, but the GBP/USD broke from the upward trending channel last week and now it trades in a sideways trend with likelihood Brexit talks failure weighing on the currency pair pushing it lower. The GBP/USD needs to break the confluence resistance of 1.3103 representing a 100-day moving average and the 38.2% Fibonacci retracement of a move from 1.4377 to 1.2662 to move lower targeting 1.3030 and 1.2970 further down.”
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