GBP/USD Price Analysis: Pullback from 1.2110 resistance confluence lures Cable bears
- GBP/USD remains pressured after reversing from the short-term key resistance confluence.
- Convergence of 200-EMA, one-month-old descending trend line challenges Cable buyers.
- Double bottoms around 1.1920-15 restricts short-term downside of the pair.
GBP/USD holds lower ground near the intraday bottom surrounding 1.2010, picking up bids of late, as bears keep the reins during early Wednesday. In doing so, the Cable pair justifies the previous day’s pullback from an important resistance, as well as the looming bear cross on the MACD.
While the failure to cross the 1.2110 hurdle, comprising 200-Exponential Moving Average (EMA) and a one-month-old downward-sloping resistance line, keeps the GBP/USD bears hopeful, a clear break of the 1.2100 threshold becomes necessary for the seller’s conviction.
Following that, the “double bottom” bullish formation around 1.1920-15 will be crucial to watch as a downside break of the same won’t hesitate to drag the GBP/USD price towards January’s low near 1.1840.
Alternatively, the pair’s recovery past the 1.2110 resistance confluence needs to cross a one-week-long horizontal resistance near 1.2150 to convince GBP/USD buyers.
In that case, the mid-February swing high of 1.2270 appears the imminent target for the bulls ahead of aiming for the previous monthly top surrounding 1.2400.
It should, however, be noted that the pair’s sustained trading beyond 1.2400 will be difficult as the multiple tops around 1.2445-50 could challenge the bulls afterward.
To sum up, GBP/USD is likely to decline further but the downside room appears limited.
GBP/USD: Four-hour chart
Trend: Limited downside expected
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
