GBP/USD outlook: Risk-off mode minimizes positive impact from freedom day

Slobodan Drvenica Windsor Brokers

GBP/USD

Cable remains offered on Tuesday hit new 4 ½ months low in extension of Monday’s 0.73% fall, driven by risk aversion on growing concerns on the global and local spread of Covid-19 Delta variant.

Investors continue to sell the pound, showing a very cautious reaction on freedom day – removal of most English coronavirus restrictions.

Monday’s close below 200DMA (1.36940 and extension below Apr-May higher base at 1.3670 and Fibo 38.2% of 1.2675/1.4249 at 1.3647, were strong bearish signals which require confirmation on an eventual close below these levels to signal reversal and confirm a double-top (1.4238/49, Feb/May tops).

Oversold daily techs suggest bears may pause after a three-day 1.3% drop and position for a fresh push lower.

Broken 200DMA should ideally cap upticks and keep bears intact.

Res: 1.3694; 1.3731; 1.3777; 1.3796.
Sup: 1.3647; 1.3628; 1.3565; 1.3519.

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

1. R3 1.3873
2. R2 1.3825
3. R1 1.375
PP 1.3702
1. S1 1.3628
2. S2 1.358
3. S3 1.3505

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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