- Bulls are targeting the falling trendline near 1.2991.
- Hourly RSI supports bulls.
- Follow up required for Thursday recovery.
Bank of England’s dovish policy had triggered a selloff in the GBP/USD to 1.2865.
The pair lost around 100-pips to touch two-day lows after BOE suggested adopting negative interest for the first time in history to fight the economic slowdown caused by the coronavirus fears along with Brexit-related uncertainties.
Also worrying the traders were the chances of a nationwide lockdown in the UK to check coronavirus spread. A further slide in the cable was avoided due to the broad-based weakness in the US dollar as the North American economic anxieties continued. At the same time, the reports of improving retail sales helped the pound.
The GBP/USD pair has formed a falling-trendline resistance around 1.2991, and the bulls have to cut it from the downside to regain the initiative. They have support from the hourly Relative Strength Index, which is above 55, indicating upside potential. Bulls could target September 10 high at 1.3035 if the above mentioned overhead resistance is taken.
The downside support will be provided by the confluence of the 21 and 50-hourly simple moving average around 1.2953. A fall below the intersection can help bears to push the pair to 200-hour moving average around 1.2923 before putting the 1.2900 level on the radar.