GBP/USD outlook: Bull-trap formation threatens of deeper fall
|GBP/USD
Cable fell some hundred pips on Wednesday as traders booked profits from Tuesday's 1.2% rally, weakening near-term structure and shifting focus lower. Bull-trap pattern is forming on daily chart following unsuccessful attempts to clearly break above daily cloud, as the pair closed above cloud top on Tuesday but subsequent weakness on Wednesday already retraced over 61.8% of Tuesday's advance and touched cloud base. Rising bearish momentum supports scenario of return and close below the cloud that would confirm bull-trap and risk deeper fall towards 22 May trough at 1.2161. It seems that euphoria over sidelining introduction of negative interest rates was short-lived and pound remains pressured by fears of hard Brexit, the fact that the UK will not benefit from EU recovery fund and sub-zero rates scenario that remains as possibility on Britain's fight to cushion devastating damages to the UK economy, caused by pandemic lockdown.
Res: 1.2275; 1.2304; 1.2354; 1.2362
Sup: 1.2238; 1.2218; 1.2182; 1.2161
Interested in GBP/USD technicals? Check out the key levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.