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  • GBP/USD rebounds swiftly from the 1.2860-55 confluence support.
  • Mixed technical indicators warrant some caution for bullish traders.

The GBP/USD pair managed to rebound around 45 pips from daily swing lows and refreshed session tops, around the 1.2940 region in the last hour.

The intraday slide stalled near the 1.2855 confluence support, comprising of the lower boundary of a short-term descending channel and the 23.6% Fibonacci level of the 1.3482-1.2676 downfall. Bulls might now be looking to build on the momentum further beyond the 200-period SMA on the 4-hourly chart, which is followed by the 38.2% Fibo. level near the 1.2985 area.

The latter coincides with the trend-channel resistance, which if cleared decisively will negate any near-term bearish bias. A subsequent strength beyond the key 1.3000 psychological mark will negate any near-term bearish bias and prompt a short-covering move. The pair might then accelerate the positive move towards the 50% Fibo. level, around the 1.3070-75 region.

Meanwhile, technical indicators on 4-hourly/daily charts maintained their bearish bias and are yet to gain any meaningful traction on the 1-hourly chart. The set-up warrants some caution for bulls and positioning for any meaningful positive move for the GBP/USD pair amid growing about the economic fallout from renewed lockdown measures to curb risking COVID-19 cases.

On the flip side, the 1.2900 mark now seems to protect the immediate downside. Failure to defend the mentioned support might turn the GBP/USD pair vulnerable to slide back towards testing the 1.2860-55 confluence support. Some follow-through selling should pave the way for a slide towards the 1.2800 mark en-route the very important 200-day SMA, around the 1.2715-10 area.

GBP/USD 4-hourly chart

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Technical levels to watch