- 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/.