Bulls need to defend 1.2800 level
The GBP/USD pair extended its recent bearish correction last week as traders started to once again focus on Brexit developments. GBP/USD forex analysis shows that the 1.2800 level is now acting as a key support and may prevent the pair from turning bearish over the medium-term. GBP/USD medium-term price trend GBP to USD technical analysis shows that the pair remains technically bullish, indicating that the GBP/USD pair is still attractive to buy on technical pullbacks. Furthermore, the recent pullback in the GBP/USD pair may help to complete an inverted head-and-shoulders pattern on the daily time frame.
Sustained losses under the 1.3000 level this week may see the GBP/USD pair testing towards the 1.2800 support region. The bollinger bands on the daily time frames are also confirming that the 1.2800 support level is extremely important The daily RSI indicator shows that despite the 600 point downside correction, the GBP/USD pair is not yet oversold. Risk-averse traders may be sidelined until the GBP/USD pair becomes more oversold and trades closer to its trend defining 200-day moving average. Traders that are more aggressive and looking to enter into the prevailing trend may look for price stabilisation around current levels, due to the fact that the GBP/USD pair has already had a substantial downside correction.
GBP/USD short-term price trend
GBP to USD technical analysis shows that the pair is only bullish over the short term while price trades above the 1.3000 level.
The last upside rally above the 1.3000 level found resistance from the 1.3075 level and was quickly sold off. This also created a fourth bearish lower high since the recent rapid decline from the 1.3000 level.
Until the recent bearish cycle of lower highs is broken, traders may use any technical corrections as a selling opportunity.
Sustained losses under the 1.3000 level should continue to trigger further technical selling, and may push the GBP/USD pair back towards the 1.2810 support level.
Key near-term resistance is located at the 1.2970 and 1.3030 level, while key support under the 1.2900 level is located at the 1.2860 and 1.2810 levels.
GBP/USD technical summary
GBP/USD forex analysis suggests that sustained losses under the 1.3000 level could trigger additional selling towards the 1.2800 level.
Traders should remember that a large inverted head and shoulders pattern is still in play on the daily time frame, and that the overall trend in the GBP/USD pair is still bullish.