GBP/USD: the key support band $1.2900/$1.3010

GBP/USD

We see that Cable is once more drifting back towards the key support band $1.2900/$1.3010. Whether this proves to be a buying opportunity will be extremely interesting now. We believe that Cable is a medium term positive outlook above $1.3000, however, near term technical indicators are a drag on that outlook. Almost since the turn of 2020, sterling has been under consistent pressure. This is not being helped by the dovish comments of now three Bank of England voting members. Cable has been dragged back to the key support of the 38.2% Fibonacci retracement (of $1.2192/$1.3515) at $1.3010. We see this (and the key December low at $1.2900) to be a key floor area for Cable if the medium term positive outlook is to remain intact. Momentum indicators are still positively configured on a medium term basis but are sliding back once more (towards 40 on RSI and neutral on MACD). This is becoming a key test of support for the bulls. Initial resistance at $1.3095 is increasingly important now.