- GBP/USD meets with some fresh supply during the mid-European session.
- The technical set-up again seems to have shifted in favour of bearish trades.
The GBP/USD pair finally broke down of its early consolidative trading range and has now dropped back closer to the key 1.30 psychological mark. Sustained weakness below 50-hour SMA was seen as a key trigger for bearish traders and behind the pair’s latest leg of a slide over the past hour or so.
The pair’s inability to capitalize on last week’s strong positive move of around 200 pips now points to possible bullish exhaustion. This coupled with a failure to find acceptance above 50% Fibonacci level of the 1.3206-1.2872 downfall further suggests the emergence of some fresh selling pressure.
Meanwhile, technical indicators on the daily chart maintained their bearish bias and have again started gaining negative traction on the 1-hourly chart have again started gaining negative traction. The set-up supports prospects for a further intraday weakness, which will be reaffirmed below the 1.30 level.
Below the mentioned handle, the pair might accelerate the slide further the 1.2955-50 intermediate support en-route 100-day SMA, currently near the 1.2920-15 region. The slide could further get extended towards the 1.2900 mark ahead of the recent swing lows, around the 1.2870 region.
On the flip side, any attempted positive move might continue to confront some fresh supply near the 1.3050-70 region. A convincing break through should negate the negative outlook and set the stage for a move beyond the 1.3100 mark towards testing the next major supply zone, around the 1.3140-50 region.
GBP/USD 1-hourly chart