GBP/USD Price Analysis: Finds some support near 38.2% Fibo./descending channel confluence region

GBP/USD edged lower on Wednesday and retreated further from two-week tops.
The technical set-up supports prospects for the emergence of some dip-buying.

Haresh Menghani FXStreet

The GBP/USD pair stalled its overnight strong bullish momentum near the 50% Fibonacci level of the 1.2644-1.2076 recent downfall and witnessed a modest pullback on Wednesday. The retracement slide dragged the pair further below the 1.2300 round-figure mark during the early European session, with bears now flirting with 38.2% Fibo. level support.

The mentioned level coincides with the lower end a downward sloping channel on intraday charts. Given the overnight strong upsurge, the channel seemed to constitute towards the formation of a bullish flag chart pattern. The technical set-up supports prospects for the emergence of some dip-buying, warranting some caution for aggressive bearish traders.

Meanwhile, technical indicators on the daily chart have been recovering from the bearish territory and have also eased from overbought conditions on the 4-hourly chart. This makes it prudent to wait for some strong follow-through selling before confirming that bulls might have already run out of the steam and positioning for any further intraday downfall.

That said, a convincing breakthrough the mentioned confluence support will negate the constructive outlook and prompt some technical selling. The pair might then accelerate the slide back towards 50-day SMA resistance breakpoint, near the 1.2270-65 area. The downward trajectory could further get extended towards 23.6% Fibo. level around the 1.2200 mark.

On the flip side, the 1.2315-20 region now seems to act as immediate resistance and is closely followed by the trend-channel barrier, around the 1.2335 region. A sustained strength beyond the said hurdle will reinforce the bullish set-up and has the potential to lift the pair further towards reclaiming the 1.2400 round-figure mark.

GBP/USD 1-hourly chart

Technical levels to watch

GBP/USD

Overview
Today last price	1.2297
Today Daily Change	-0.0036
Today Daily Change %	-0.29
Today daily open	1.2333

Trends
Daily SMA20	1.2317
Daily SMA50	1.2278
Daily SMA100	1.2606
Daily SMA200	1.2667

Levels
Previous Daily High	1.2363
Previous Daily Low	1.2187
Previous Weekly High	1.2296
Previous Weekly Low	1.2076
Previous Monthly High	1.2648
Previous Monthly Low	1.2165
Daily Fibonacci 38.2%	1.2296
Daily Fibonacci 61.8%	1.2254
Daily Pivot Point S1	1.2225
Daily Pivot Point S2	1.2118
Daily Pivot Point S3	1.2049
Daily Pivot Point R1	1.2402
Daily Pivot Point R2	1.2471
Daily Pivot Point R3	1.2578

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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