Search ForexCrunch
  • The GBP/USD pair finally broke down of its two-day-old consolidative trading range and dropped to fresh two week lows, around mid-1.2500s on Friday.
  • A modest pickup in the USD demand – supported by an intraday turnaround in the US Treasury bond yields, exerted some fresh bearish pressure on the pair.

The pair had been oscillating between two converging trend-line, forming a symmetrical triangle on the 1-hourly chart. Given the recent sharp decline, the triangle constituted towards the formation of a bearish continuation – Pennant chart pattern.

A sustained break below the triangle support near the 1.2575 region was seen as a key trigger behind a sudden drop during the early European session on Friday, though slightly oversold conditions on hourly charts might help limit any further downfall.

Meanwhile, oscillators on the daily chart maintained their bearish bias and support prospects for an extension of the depreciating move, through traders are likely to hold back from placing any aggressive bets ahead of the US monthly jobs report (NFP).

Immediate support is pegged near the 1.2530 horizontal level, below which the pair is likely to accelerate the slide further towards challenging the key 1.2500 psychological mark en-route the next support near the 1.2475 region.

On the flip side, attempted recoveries might now confront some fresh supply near the support breakpoint, around the 1.2575 region, capping any subsequent up-move near the 1.2600 handle amid persistent UK political and economic uncertainty.

GBP/USD 1-hourly chart