- GBP/USD fades corrective bounce off six-week low within short-term triangle.
- Sustained trading below 200-SMA, steady RSI keeps Cable hears hopeful.
- Multiple technical levels beyond 1.2600 stand tall to challenge Pound Sterling’s downside.
GBP/USD retreats to 1.2700 as bulls fail to keep the reins ahead of Wednesday’s top-tier US/UK catalysts, after a surprise entry the previous day.
That said, the Cable pair eases within a 1.5-month-old symmetrical triangle following a corrective bounce after the UK’s latest employment report. It’s worth noting that the Pound Sterling’s latest restoration of the original trend could also be linked to the market’s cautious mood ahead of British inflation data and Monetary Policy Meeting Minutes of the Federal Open Market Committee (FOMC).
Also read: GBP/USD upthrust spurred by UK’s wage growth, despite US retail sales surge
Technically, the GBP/USD pair’s sustained trading below the 200-SMA and failure to defy the stated triangle formation by an upside break of the 1.2750 immediate hurdle favor the sellers. Adding credence to the downside bias is the steady RSI (14) line.
However, the quote needs to provide a successful downside break of the triangle’s bottom line, close to 1.2670 at the latest to convince the sellers.
Even so, the double bottoms around 1.2620 and a two-month-old horizontal area surrounding 1.2600 can test the GBP/USD bears before giving them control.
On the flip side, a clear break of the 1.2750 isn’t enough for the GBP/USD bulls to retake the driver’s seat as the 200-SMA level of around 1.2830 could challenge the upside momentum.
Following that, the Cable pair’s run-up towards the late July peak surrounding the 1.3000 threshold can’t be ruled out.
GBP/USD: Four-hour chart
Trend: Further downside expected
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