GBP/USD formed a lower high at the start of this month, pressured by the strong resistance in the 1.30 area. Not far above it, there are the declining 100- and 200-week MAs. This zone looks even more like a hard obstacle if we remember about the ongoing political uncertainty in the UK and the recent hints from the Bank of England that it’s ready to cut rates in a no-deal Brexit scenario.
The Awesome Oscillator is declining on the D1. The decline below support at 1.28 will confirm a “double top” and lead the price down to 1.2730 (50-week MA) and 1.2700 (200-day MA). There will likely be demand for the pound at these levels limiting the further decline.
The short-term downtrend creates resistance around 1.2850 and 1.2880 (50- and 100-period MAs on the H4). An increase above the latter is needed to allow GBP/USD retest 1.2950 (resistance line connecting October and November highs).
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