The GBP/USD pair is confined to a tight range this Monday, with a short lived spike up to 1.5506 attracting short term selling interest. The daily low has been set early Asia at 1.5458 and with London off, the pair presents a neutral intraday technical stance.
Nevertheless, the 4 hours chart for the pair shows that the price is pressuring the 50% retracement of its latest bullish run from 1.5088 to 1.5814, around 1.5440, level that triggered a strong come back when tested last week. In the same chart, the price is developing below a flat 20 SMA, whilst the technical indicators lack directional strength, keeping the risk towards the downside. Overall, the pair can extend its decline on dollar's strength, albeit the slides are expected to be limited, compared to other high yielders, considering the UK is also in the path of tightening its economic policy, albeit considering to start in 2016.
A break below the mentioned Fibonacci support should lead to additional declines that can extend intraday down to 1.5390, whilst below this last, the 61.8% retracement of the same rally is next, at 1.5360. The immediate strong resistance stands at 1.5540, 38.2% retracement of the same rally, and it will take a clear advance above it to deny the downside and see the pair recovering ground towards the 1.5620 price zone, quite unlikely for this Monday.
View live chart of the GBP/USD
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