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GBP/USD is starting the week higher, up 0.32% to 1.2835, but Monday’s 4-hour chart is pointing to further losses. The recent upside move looks like a “dead cat bounce” – not the beginning of a turnaround, according to FXStreet’s analyst Yohay Elam.

Key quotes

“GBP/USD continues suffering from downside momentum on the 4-hour chart despite the recent stabilization. The 50 Simple Moving Average crossed the 200 SMA to the downside – another bearish development. The Relative Strength Index has topped the 30 level, thus exiting oversold conditions and opening the door to more falls. Overall, the recent upside move looks like a “dead cat bounce” – not the beginning of a turnaround.” 

“Support awaits at last week’s low of 1.2760, followed by 1.2720, 1.2650, 1.26, and 1.2525 – all levels dating back to July.” 

“Resistance is at 1.2865, the peak of the recent low range. The next level to watch is 1.2970, which supported sterling late last week, before 1.3045, which capped a recovery attempt.”