- GBP/USD witnessed some heavy selling post-BoE and broke below ascending channel support.
- The set-up favours bearish traders and supports prospects for a slide back toward multi-week lows.
- Any attempted bounce will be seen as a selling opportunity and remain capped near the 1.2900 mark.
The GBP/USD pair added to its post-BoE losses and continued losing ground through the early North American session. The downward momentum dragged the pair further below the 1.2900 level, support marked by the lower boundary of a short-term ascending channel.
Given last week’s huge sell-off, the mentioned channel constituted the formation of a bearish continuation flag pattern on short-term charts. A convincing breakthrough the channel support might have already set the stage for the resumption of the bearish trend.
The negative outlook is further reinforced by bearish technical indicators on the daily chart. Hence, some follow-through weakness below the 1.2800 round-figure mark, towards retesting multi-week lows, around the 1.2765-60 region, now looks a distinct possibility.
The latter is closely followed by the very important 200-day SMA, around the 1.2730 zone, which if broken decisively will be seen as a fresh trigger for bearish traders. This, in turn, will pave the way for a further near-term depreciating move.
On the flip side, any attempted recovery might confront a stiff resistance near the mentioned trend-channel support breakpoint, now turned resistance near the 1.2900 mark. Any subsequent move up will now be seen as a selling opportunity and runs the risk of fizzling out rather quickly.
GBP/USD 1-hourly chart
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Technical levels to watch
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