GBP/USD Forecast: relief rally completed, back to sell mode

Valeria Bednarik FXStreet

The GBP/USD pair recovered sharply early London advancing up to 1.2324 after being as low as 1.2088 late Tuesday. The Pound jumped on a surprise announcement from PM Theresa May, saying that she will allow Parliament to vote on her plan to take the EU out of the European Union, although remarking that the Houses shouldn't try to block Brexit or “undermine the negotiating position of the government.”

The GBP/USD pair´s relief rally, however, met a barrier in the 1.2300 region, and the price was unable to settle above it, finally turning lower and currently trading at 1.2252. The 4 hours chart shows that the price was capped by a bearish 20 SMA, whilst technical indicators have recovered from extreme oversold readings, but lost upward momentum and now consolidate well below their mid-lines, indicating that the risk remains towards the downside.

The mentioned 20 SMA stands at 1.2340, and it will take a recovery above it to deny a bearish extension and see the pair extending its recovery up to the 1.2400 region.

Below 1.2220 on the other hand, the pair will probably resumed its slide, with the next intraday supports at 1.2170 and 1.2130.

View live chart of the GBP/USD

Author

Valeria Bednarik

FXStreet

Valeria Bednarik was born and lives in Buenos Aires, Argentina. Her passion for math and numbers pushed her into studying economics in her younger years.

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