GBPUSD – recovery needs to clear 1.27 resistance zone to generate continuation signal

Cable remains at the front foot in early Tuesday trading and attempts to extend 0.43% bounce on Monday, which generated initial bullish signal on completion of bullish engulfing pattern on daily chart.

However, fresh bulls face increased headwinds at 1.2700 zone (psychological barrier reinforced by 10DMA) and nearby Fibo 38.2% of 1.2860/1.2622, reinforced by daily Tenkan-sen (1.2713).

Bear-cross of daily Tenkan/Kijun-sen and still negative momentum on daily chart continue to send warning signals of possible recovery stall.

Daily MA’s are in mixed setup, but daily cloud is below the price and thickening, which offers support.

Watch reaction on 1.2700/13 zone, with firm break to confirm initial bullish signal and open way for further recovery.

Conversely, fresh bulls may stay on hold on failure to break higher, while initial negative signal could be expected on close below broken Fibo 23.6% barrier (1.2678) and expose lower pivots at 1.2641/22 (100DMA / June 21 low).

Res: 1.2713; 1.2728; 1.2741; 1.2769
Sup: 1.2678; 1.2656; 1.2641; 1.2622