GBPUSD – risk of deeper pullback towards strong 1.40 support exists
Cable eases in early Monday’s trading and pressures 1.41 support, following last week’s double upside rejection at 1.43 zone.
Friday’s candle with long upper shadow, left after strong rejection ticks under 1.4300 barrier weighs on near-term action for deeper pullback after last week’s action stalled on approach to weekly 200SMA (1.4384).
Weak hourly structure supports further easing for test of Thursday’s low at 1.4082 and daily Tenkan-sen (1.4050), violation of which would expose strong support at 1.4000 (psychological support / Fibo 38.2% of 1.3457/1.4344 / rising 10SMA).
Overall bulls favor shallow correction which should be ideally contained above 1.40 support before fresh attempts higher, however, risk of deeper correction on loss of 1.40 handle, cannot be ruled out as studies on daily and weekly charts are overbought.
Bearish scenario will be activated on firm break below 1.40 and would risk extension towards next key support at 1.3800 (Fibo 61.8% / rising 20SMA).
Res: 1.4158; 1.4182; 1.4218; 1.4286
Sup: 1.4100; 1.4082; 1.4050; 1.4000