- The GBP/USD pair once again failed to make it through the 1.2750-60 supply zone on Wednesday, forming a bearish double-top pattern on the 1-hourly chart.
- A subsequent break below the 1.2700 handle – coinciding with 200-hour SMA, was seen as a key trigger for bearish traders and a follow-through slide on Thursday.
Despite the pullback, the pair remains well within this week’s broader trading range and thus, warrant some caution before positioning for any further depreciating move ahead of the first round of votes for the UK leadership contest.
Meanwhile, technical indicators on the daily chart maintained their bearish bias on the daily chart and have also started gaining negative momentum on the 4-hourly chart, supporting prospects for an eventual bearish breakdown.
However, traders are likely to wait for a convincing break below weekly lows support near the 1.2655-50 region, below which the pair is likely to accelerate the slide further towards challenging the 1.2600 round figure mark.
On the flip side, any attempted recovery might now confront some fresh supply near the 1.2700 handle, though the 1.2745-50 region remains a key pivotal point for bulls and to negate the well-established near-term bearish set-up.
GBP/USD 1-hourly chart