- GBP/USD gains some traction on Monday, albeit lacks any strong follow-through.
- The set-up favours bearish traders s and supports prospect for a further downfall.
The GBP/USD pair gained some positive traction on Monday and for now, seems to have snapped three consecutive days of winning streak. The pair refreshed session tops in the last hour, albeit lacked any strong follow-through and remained well below the 1.2200 confluence region.
The mentioned barrier comprises of 200-hour SMA and the top end of a near one-week-old descending trend-channel. This, in turn, should act as a key pivotal point for short-term traders and help determine the GBP/USD pair’s next leg of a directional move.
Meanwhile, technical indicators on hourly/daily charts maintained their bearish bias and are still far from gaining any meaningful traction. The set-up seems tilted in favour of bearish traders and supports prospects for an extension of the recent rejection slide from 50-day SMA.
Hence, any subsequent move up towards the 1.2200 confluence hurdle might still be seen as a selling opportunity. Rising bets for negative BoE interest rates, coupled with Brexit uncertainties should continue to take its toll on the sterling and cap any meaningful positive move.
On the flip side, the 1.2160-50 region now seems to have emerged as immediate support, which if broken will set the stage for a slide towards the trend-channel support, currently near the 1.2100 mark. This is closely followed by multi-week lows, around the 1.2075 region.
Some follow-through selling below the said support levels now seems to pave the way for a further near-term depreciating move. Bears might then aim to challenge the key 1.20 psychological mark.
GBP/USD 1-hourly chart
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Technical levels to watch
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