- GBP/USD managed to recover the early lost ground to 1.2185 region.
- The set-up warrants some caution before placing fresh directional bets.
The GBP/USD pair recovered around 60 pips from an intraday low level of 1.2185 and refreshed daily tops during the mid-European session. The uptick lacked any strong follow-through, with bulls now looking to extend the momentum beyond 200-hour SMA.
The daily swing high, around the 1.2245 region, coincides with the top end of a descending trend-channel formation on the 1-hourly chart. This is followed by 100-day SMA resistance, currently near the 1.2270 region, which if cleared might be seen as afresh trigger for intraday bullish traders.
Meanwhile, technical indicators on 4-hourly charts are yet to gain any meaningful traction and maintained their bearish bias on the daily chart. The set-up warrants some caution before placing any fresh bullish bets and positioning for any further appreciating move.
Hence, it will be prudent to wait for a sustained strength beyond the 1.2300 mark, above which the pair is likely to extend this week’s strong rebound from sub-1.2100 level and aim to test the 1.2340-45 supply zone. Some follow-through buying has the potential to lift the pair further towards reclaiming the 1.2400 round-figure mark.
On the flip side, the 1.2185-75 region now seems to have emerged as immediate support, which if broken decisively, should accelerate the slide further towards the 1.2100 mark. A subsequent fall below the 1.2075 level might turn the pair vulnerable to resume its recent rejection slide from the very important 200-day SMA.
GBP/USD 1-hourly chart
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Technical levels to watch
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