- GBP/USD reversed an early dip to the 1.3100 neighbourhood or weekly lows.
- Overbought conditions on daily chart warrant some caution for bullish traders.
Earlier this Wednesday, the GBP/USD pair witnessed some long-unwinding trade and retreated farther from eight-month tops set in the previous session. The early slide confirmed a near-term bearish break below confluence support comprising of 100-hour SMA and ascending trend-channel support.
Despite the bearish set-up, the pair showed some resilience at lower levels and managed to attract decent buying interest ahead of the 1.3100 round-figure mark. The pair built on the goodish intraday bounce from weekly lows and is currently placed at the top end of its daily trading range, around the 1.3170-75 region.
Meanwhile, technical indicators on the 1-hourly chart have again started gaining positive momentum and support prospects for additional intraday gains. However, oscillators on the daily chart are still flashing near-term overbought conditions and thus, warrant some caution ahead of the FOMC policy decision.
Moreover, investors might now prefer to wait for the outcome of the UK election before positioning for the pair’s next leg of a directional move. Hence, it will be prudent to wait for some strong follow-through buying beyond the 1.3200 handle before placing any aggressive bullish bets.
GBP/USD 1-hourly chart
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