GBP/USD Price Analysis: Consolidates in a range near mid-1.2200s, remains vulnerable

• GBP/USD struggled to capitalize on the overnight bounce from 23.6% Fibo. level.
• The technical set-up might have already shifted back in favour of bearish traders.
• A sustained break below 1.2200 now seems to pave the way for further weakness.

The GBP/USD pair struggled to capitalize on the overnight bounce from the 1.2200 neighbourhood and seesawed between tepid gains/minor losses through the early European session.

Given the previous day’s sharp intraday fall from the 1.2365 confluence resistance, the set-up might have already shifted back in favour of bearish traders. The said hurdle comprised of 50% Fibonacci level of the 1.2644-1.2076 downfall and 200-period SMA on the 4-hourly chart.

Meanwhile, technical indicators on the daily chart maintained their bearish bias and have again started gaining negative momentum on hourly charts. This, in turn, reinforces the bearish outlook and supports prospects for the resumption of the recent rejection slide from 200-day SMA.

However, it will be prudent to wait for a sustained break below the overnight swing lows before positioning for any further near-term depreciating move. The 1.2200 mark coincides with 23.6% Fibo. level, which if broken decisively, might be seen as a fresh trigger for bearish traders.

Some follow-through weakness below the 1.2180-70 region will confirm a fresh bearish breakdown and set the stage for a slide back towards the 1.2100 mark. The momentum could further get extended back towards retesting multi-week lows support, around the 1.2075 region.

On the flip side, the 38.2% Fibo. level, around the 1.2290-1.2300 region now seems to act as an immediate resistance, above which the pair is likely to make a fresh attempt to challenge the 1.2365 confluence region.

GBP/USD 4-hourly chart

Technical levels to watch