GBP/USD outlook: The downside remains vulnerable after short-lived advance

Slobodan Drvenica Windsor Brokers

GBP/USD

Cable started trading on Monday with a gap-higher, but gains were so far short-lived and stalled under last week’s high at 1.1439.

Fresh optimism about a solution for deepening political crisis in Britain on expectations that Rishi Sunak will be next Prime Minister, after Boris Johnson retreated, inflated pound in early Monday, but fresh bulls lacked strength to break higher.

Daily studies are bearishly aligned as negative momentum rises but firmer signals are still needed.

Filling today’s gap would add to negative near-term structure, with extension and close below 20DMA (1.1181) to generate bearish signal and make the downside more vulnerable for test of key supports at 1.1060/00 (Friday’s spike low / psychological).

Initial resistance lays at 1.1439 (Oct 17 high) guarding pivot at 1.1495 (monthly high), violation of which would bring bears fully in play.

Res: 1.1439; 1.1495; 1.1550; 1.1590.
Sup: 1.1272; 1.1229; 1.1181; 1.1091.

Interested in GBP/USD technicals? Check out the key levels

1. R3 1.1645
2. R2 1.148
3. R1 1.139
PP 1.1225
1. S1 1.1135
2. S2 1.097
3. S3 1.0881

Author

Slobodan Drvenica

Windsor Brokers

Industry veteran with over 22 years’ experience, Slobodan Drvenica joined Windsor Brokers in 1995 when he was an active trader for more than 10 years, managing the trading desk and own account departments.

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