GBP/USD outlook: Recovery loses steam after two-week rally but bulls remain in play

Slobodan Drvenica Windsor Brokers

GBP/USD

Cable keeps positive tone at the start of the week following strong rally in past two weeks (3.1%) but bulls face headwinds from falling weekly Tenkan-sen (1.2661) which capped recovery last Friday and continues to limit the action today.

Today’s narrow range generates initial signs of stall as overbought stochastic on overall bullishly-aligned daily studies suggests bears may pause here for consolidation.

Repeated daily close above broken Fibo 38.2% of 1.3298/1.2155 bear-leg (1.2592) would add to positive signals, though extended dips are not ruled out, but need to stay above rising 10DMA (1.2533) to keep near-term bias with bulls.

Break of 10DMA support would weaken near-term structure and add to signs of recovery stall.

On the other side, lift above 1.2726 (50% retracement of 1.3298/1.2155) is needed to signal bullish continuation.

Res: 1.2666; 1.2700; 1.2726; 1.2772.
Sup: 1.2592; 1.2533; 1.2471; 1.2440.

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

1. R3 1.2759
2. R2 1.2713
3. R1 1.2671
PP 1.2625
1. S1 1.2583
2. S2 1.2537
3. S3 1.2495

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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