pound-sterling-gbp-coin - GBP
  • GBP/USD bounces off 1.2860-55 confluence support
  • Mixed technical indicators warrant for caution 

GBP/USD rebounded some 45 pips from the daily  low  hitting the high of the day at  1.2940.

The selloff stalled close to 1.2855 confluence support,  of the lower boundary of a short-term descending channel and the 23.6% Fibonacci level of the 1.3482-1.2676 downfall. GBP/USD bulls might look to build gains further beyond the 200-period SMA on the 4-hourly chart, which is followed by the 38.2% Fibo. level at 1.2985.

Should resistance at 1.2985 be cleared it will negate the near-term bearish trend. A move above 1.3000 psychological mark will negate any near-term bearish trend whilst also prompting a short-covering move. GBP/USD could then accelerate higher towards the 50% Fibo. level, 1.3070-75.

Technical indicators on 4-hourly/daily charts remain bearish and still lack traction on the 1-hourly chart. Bulls should act with caution amid rising concerns over the economic impact  from a renewed lockdown to stem risingCOVID-19 cases.

Immediate support can be seen at1.2900A break through here, could open the door to 1.2860-55 confluence support, whilst follow-through selling could set the scene for a further decline to 1.2800  en-route to the very important 200-day SMA, at 1.2715-10/.