GBP/USD technical analysis: Inside day makes Tuesday’s close pivotal

• GBP/USD created an inside bar candlestick on Monday, neutralizing the immediate bullish setup.  
• A close above 1.2650 is needed to revive the bullish setup.  

GBP/USD created an inside bar candlestick pattern on Monday, making Tuesday’s GMT close pivotal.

An inside bar occurs when the daily high and low falls within the preceding day’s trading range. On Monday, the pair hit a high and low of 1.2650 and 1.2516, respectively, and the trading range fell well within Friday’s high and low of 1.2707 and 1.2406.

Monday’s inside bar has neutralized the bullish view put forward by Friday’s upside break of the trendline connecting March 13 and May 6 highs.

The outlook would again turn bullish if the pair closes Tuesday above Monday’s inside bar high of 1.2650. That would imply a continuation of the rally from recent lows near 1.22. On the way higher, the 200-day moving average at 1.2710 may prove a tough nut to crack. The average capped upside on Friday.

The outlook would turn bearish if the pair ends Tuesday below 1.2516 (Monday’s low). As of writing, the pair is trading at 1.2614, representing marginal gains on the day.  

Daily chart

Trend: Neutral

Technical levels