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The cable’s recent slump of around 1200 pips from the 1.3200 round-figure mark has been along a short-term descending trend-channel formation on GBP/USD short-term charts, according to Haresh Menghani from FXStreet.

Key quotes

“The set-up indicates a well-established bearish trend and hence, any subsequent recovery beyond the 1.2100 mark is likely to confront stiff resistance, rather remain capped near the top end of the mentioned channel, currently near the 1.2175-80 region.”

“A convincing breakthrough might negate prospects for any further downfall and prompt some aggressive near-term short-covering move.”

“On the flip side, bearish traders are likely to aim for a sustained weakness below the 1.20 mark before positioning for a slide back towards early September 2019 swing lows, around the 1.1960-55 region.”