Flirt with daily lows near 1.3350, decline seems limited

• GBP / USD retraces again from the resistance of the ascending channel, around the 1.3400 level.
• The setup still favors the bulls and supports the outlook for some lower buying to emerge.
• A sustained break below the 1.3270 support is needed to invalidate the positive short-term outlook.

GBP / USD has continued its struggle to regain the round 1.3400 level and has witnessed a modest intraday pullback from the highest level since early September. The mentioned level marks the upper limit of the resistance of a two-month-old uptrend channel, which should now act as a key point for short-term investors.

Meanwhile, the technical indicators on the daily chart maintain their bullish bias and are still far from being in overbought territory. This, coupled with the fact that the pair has been drawing some buying near the 1.3300-1.3290 region, favors the bulls and supports the prospects for an eventual breakout to the upside in the short term.

Any subsequent decline is likely to find decent support near the horizontal level at 1.3270, which if decisively broken will negate the constructive short-term outlook. This, in turn, could trigger some technical selling and make GBP / USD vulnerable to accelerate the corrective slide towards the round 1.3200 level.

On the other hand, the bulls may need to wait for some continuation strength above the 1.3400 level before positioning for any further bullish movement. The GBP / USD pair could then accelerate the positive move towards the September monthly highs around the 1.3480 region, on its way to the key psychological level of 1.3500.

GBP / USD daily chart

GBP / USD technical levels