- GBP / USD has been struggling to pull back above the 1.3875-80 support break point.
- The setup favors bearish traders and supports prospects for further weakness.
The pair GBP/USD It was unable to capitalize on Friday’s good rebound from levels below 1.3800, or 2-1 / 2-week lows, and the upside remained limited near the 1.3875-80 bid zone. This marks a break point of the descending triangle support.
Apart from this, repeated pullbacks from near the 1.4000 psychological level formed a bearish double top on the daily chart. The combination of bearish patterns supports the prospects for an extension of the recent bearish trajectory.
However, the downward trend of new COVID-19 cases in the UK, coupled with the end of pandemic-related restrictions and indications from the BoE of a modest adjustment acted as a tailwind for the pound. sterling and helped limit the downside of the GBP / USD pair.
There is no major market-moving economic data released in the US on Monday. Also, this makes it prudent to wait for a solid follow-up to selling before confirming the bearish outlook and positioning for any further appreciation moves.
From current levels, any move beyond the breakout point of the aforementioned horizontal support could be seen as a short opportunity near 1.3900. This should limit any significant gains for the GBP / USD near the 100-day SMA, around the 1.3910-15 area.
On the other hand, some follow-up selling below the daily lows around the 1.3840-35 region could find some support near the 1.3800-1.3790 region. Some subsequent selling could drag GBP / USD towards the 1.3730-25 support zone.
4-hour chart GBP / USD
Technical levels
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
