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Friday’s 4-hour chart is pointing to further falls for the cable. Yohay Elam, an analyst at FXStreet, thinks GBP/USD has experienced a dead cat bounce, reaching levels above 1.28, and now expects a test of the 100-day SMA, near the 1.2545 region.

Key quotes

“Momentum on the 4-hour chart has turned to the downside, and cable dropped below the 50 Simple Moving Average. The Relative Strength Index remains below 70 – outside overbought conditions.” 

“All in all, bears are in control and the recent rise from the lows looks like a dead cat bounce – a minor increase before the next fall.”

“Support awaits at 1.2545, the daily low, followed by 1.25, which was a trough last week. Next, 1.2470 is where the SMA 100 hits the price and it is followed by 1.24.”

“Resistance is at 1.2575, a recent swing low, followed by 1.2650, which is where the 50 SMA hits the price.”


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