GBP/USD Price Analysis: 1.2955 caps the immediate bounce from six-week lows
- GBP/USD attempts a bounce from six-week lows.
- Rectangle breakdown on 15-minutes chart fuelled the sell-off.
- Rebound to remain capped near a strong hurdle at 1.2955.
GBP/USD is making recovery attempts from fresh six-week lows of 1.2920, although the looming Brexit risks combined with broad dollar strength could keep the bounce limited.
The bulls could also turn cautious ahead of the release of the UK government’s internal market bill due later today.
The bill sets out the British government’s plans to ensure trade between all four home nations remains barrier-free after the Brexit transition period ends on 31 December 2020, per Sky News.
From a technical perspective, the pair charted a rectangle breakdown on the 15-minutes chart over the last hours, with the pattern target at 1.2929 already achieved. The bears, further, extended control and reached six-week lows at 1.2920.
Thereafter, the price staged a quick rebound but the sellers will continue to lurk around 1.2955, the confluence of the pattern support and 21-Simple Moving Average (SMA).
Should the recovery gain momentum above the latter, the next resistance is seen at the downward sloping 50-SMA of 1.2965.
The Relative Strength Index (RSI) on the said time frame has bounced-off the oversold territory, still remains in the bearish region around 38.45.
GBP/USD: 15-minutes chart
GBP/USD: Additional levels
Author
Dhwani Mehta
FXStreet
Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.
