GBP/USD Price Analysis: Pullback from 1.2110 resistance confluence lures Cable bears
|- GBP/USD remains pressured after reversing from the short-term key resistance confluence.
- Convergence of 200-EMA, one-month-old descending trend line challenges Cable buyers.
- Double bottoms around 1.1920-15 restricts short-term downside of the pair.
GBP/USD holds lower ground near the intraday bottom surrounding 1.2010, picking up bids of late, as bears keep the reins during early Wednesday. In doing so, the Cable pair justifies the previous day’s pullback from an important resistance, as well as the looming bear cross on the MACD.
While the failure to cross the 1.2110 hurdle, comprising 200-Exponential Moving Average (EMA) and a one-month-old downward-sloping resistance line, keeps the GBP/USD bears hopeful, a clear break of the 1.2100 threshold becomes necessary for the seller’s conviction.
Following that, the “double bottom” bullish formation around 1.1920-15 will be crucial to watch as a downside break of the same won’t hesitate to drag the GBP/USD price towards January’s low near 1.1840.
Alternatively, the pair’s recovery past the 1.2110 resistance confluence needs to cross a one-week-long horizontal resistance near 1.2150 to convince GBP/USD buyers.
In that case, the mid-February swing high of 1.2270 appears the imminent target for the bulls ahead of aiming for the previous monthly top surrounding 1.2400.
It should, however, be noted that the pair’s sustained trading beyond 1.2400 will be difficult as the multiple tops around 1.2445-50 could challenge the bulls afterward.
To sum up, GBP/USD is likely to decline further but the downside room appears limited.
GBP/USD: Four-hour chart
Trend: Limited downside expected
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.