GBP/USD outlook: Bears are taking a breather on oversold studies / profit-taking

ANALYSIS | 05/20/2019 09:57:59 GMT

GBPUSD

Cable consolidates above multi-month low at 1.2714 on Monday after suffering heavy losses last week. The pair was down 2.1% for the week, as bears were additionally boosted by collapse of Brexit talks between Tory and Labor party.
Deeply oversold stochastic is turning north and RSI reversed from oversold zone, suggesting adjustment, as traders are looking to book some profits from last week’s fall, which marks the biggest weekly loss since Feb 2018.
With overall negative sentiment and bearish daily / weekly studies, limited correction is seen as likely scenario.
Broken Fibo support at 1.2773 mark initial resistance, followed by falling 5SMA at 1.2801, with extended upticks expected to stall under key barriers at 1.2865 (25 Apr former low) and 1.2892 (Fibo 38.2% of 1.3179/1.2714) before bears regain control.

Res: 1.2773; 1.2801; 1.2865; 1.2892
Sup: 1.2724; 1.2714; 1.2668; 1.2629

Interested in GBPUSD technicals? Check out the key levels

1. R3 1.2874
2. R2 1.2842
3. R1 1.2776
PP 1.2744
1. S1 1.2678
2. S2 1.2646
3. S3 1.258

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