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Failure of GBP/USD to recover past the secondary highs of 1.4005 has motioned a corrective retreat, with technical support pivots at 1.3876 and 1.3812 breached. A move under support pegged at 1.3652 oils the downside correction further, with 1.3542 a possible target of a prior triangle pattern breakdown, as reported by DBS Bank.  

Key quotes

“Take note that GBP has edged lower under the 40-day moving average (dma) of 1.3876 which glued several support rebounds since last October. And, if GBP stays under trend support drawn from 1.2855 (early November lows) around 1.3812, there is room for further corrective pressure. Both the technical indicators show for now the downside is the path of least resistance.”

“The UK’s superior vaccine rollout provides a shield or two, but a move under cloud support of 1.3652 and the 100-dma at 1.3641 is likely to see positions further adjusted.”

“A quick look at the monthly chart shows that GBP’s upside progress is tamed as it contoured into the 100-month moving average at 1.4119. Nonetheless, GBP’s inherent major bull trend remains intact unless GBP breaks determinedly under its trend support around 1.3322 and its 200-dma at 1.3286. The price path for GBP appears to be a combination of two. Prices should continue to glide lower via a channel, but it is a prior sideway triangle that provides a stronger hint of a near-term target. A 100% mapping lower of the triangle’s girth delivers 1.3542 as a target with over-shooting granting 1.3460.”