- GBP / USD is unable to retain its intraday gains and is back around 50 pips from the daily highs.
- Mixed technical indicators on the 1-hour and daily charts warrant some caution for bears.
The GBP / USD pair has struggled to capitalize on its initial rally and has now retraced around 50 pips from intraday highs near the 1.3720-25 region. Despite the pullback, the pair has shown some resistance above the 100 hourly SMA.
Meanwhile, the technical indicators on the one-hour chart have just started to move into negative territory. That being said, the oscillators on the 4-hour / day charts, while losing positive momentum, have yet to confirm a bearish outlook.
This warrants some caution for aggressive bears and before positioning for any further short-term corrective declines. Therefore, the daily low, around the 1.3635 region, should act as a fundamental point for short-term investors.
Below the mentioned support level, the GBP / USD pair could become vulnerable to break below the round level of 1.3600. The move lower could drag GBP / USD towards the 1.3520 region, at last week’s lows.
On the other hand, the round level of 1.3700 now turns into a strong immediate resistance. This is closely followed by daily highs, around the 1.3720-25 region, before targeting 1.3750, in multi-year highs hit last Thursday.
A sustained move above that region should pave the way for an extension of the recent strong bullish momentum and push GBP / USD towards the round 1.3800 level. The next relevant target on the upside is near the 1.3840 region, which marks the upper limit of a four-month-old bull channel.
GBP / USD 1 hour chart
GBP / USD technical levels
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