GBPUSD – bears may take a breather above weekly cloud top before continuing
Cable bounces from European session low at 1.3205 after bears touched weekly cloud top, facing strong headwinds.
Limited consolidation is seen as likely near-term scenario as studies remain bearish and rising concerns about political uncertainty in Italy and Spain keeps pound at the back foot.
Further pressure on Sterling comes from expectation about BoE rate hike which decreased from 80% to 61.8%.
Also, oversold daily RSI and slow stochastic continue to head south, providing no bullish signal for now.
Recovery attempts should ideally hold below falling 5SMA (1.3323, also today’s high), with stronger upticks to be capped by descending 10SMA (1.3395) to keep bears intact for renewed attack at weekly cloud top and continuation of downtrend from 1.4376 high on break.
Res: 1.3323; 1.3356; 1.3395; 1.3421
Sup: 1.3205; 1.3153; 1.3100; 1.3040