GBP/USD Price Analysis: Drops to multi-day lows around 1.2160 level, lacks follow-through
|- GBP/USD once again fails near the 200-hour SMA/descending channel confluence resistance.
- Mixed oscillators on daily/hourly charts warrant some caution before placing directional bets.
The GBP/USD pair continued with its struggle to move back above the 200-hour SMA and turned lower for the third consecutive session on Friday. The intraday pullback from a resistance marked by the top end of an ascending trend-channel formation on the 1-hourly chart dragged the pair to multi-day lows around the 1.2160 region in the last hour.
The intraday downward bias was reinforced by bearish oscillators on 4-hourly/daily charts. However, technical indicators on the daily charts have moved on the verge of breaking into overbought territory and warrant some caution. Hence, any subsequent slide is likely to remain limited near the trend-channel support, around the 1.2140 region.
Meanwhile, any attempted recovery might continue to confront some fresh supply near the mentioned confluence hurdle, currently around the 1.2225 region. This is followed by 50-day SMA, near the 1.2270 region, which if cleared decisively, might be seen as a fresh trigger for bullish traders and prompt some near-term short-covering move.
The pair might then look to surpass the 1.2290-1.2300 region and aim to test the 1.2340 resistance zone. Some follow-through buying has the potential to lift the pair further towards the 1.2400 round-figure mark en-route the next major hurdle near the 1.2465-70 zone.
GBP/USD 1-hourly chart
Technical levels to watch
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