GBP/USD outlook: Bears are taking a breather above important supports

Slobodan Drvenica Windsor Brokers

GBP/USD

Pullback from new 2023 peak extends into sixth straight day, although bears face headwinds at important support zone at 1.2866/43 (50% retracement of 1.2590/1.3141 upleg / 20DMA) and consolidating above these levels in European session on Friday.

Oversold stochastic contributes to scenario, however, consolidation is likely to be narrow and short, as dollar continues to strengthen and weighs on sterling.

Firm break of 1.2866/43 pivots is needed to generate fresh bearish signal for test of immediate support at 1.2801 (Fibo 61.8% / 30DMA) and possible stronger acceleration.

The pair is on track for bearish weekly close and the biggest weekly drop since the last week of January, with potential formation of bearish engulfing pattern on weekly chart, to add to negative signals.

Broken Fibo 38.2% (1.2931) should cap extended upticks and keep bears in play.

Res: 1.2904; 1.2931; 1.3000; 1.3041.
Sup: 1.2843; 1.2801; 1.2750; 1.2720.

Interested in GBP/USD technicals? Check out the key levels

1. R3 1.3066
2. R2 1.3015
3. R1 1.2941
PP 1.2891
1. S1 1.2817
2. S2 1.2766
3. S3 1.2692

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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