GBP/USD looks like it trying its best to rollover to the downside
- GBP/USD is trading 0.16% lower on Tuesday after being higher earlier on in the session.
- The price met a strong resistance zone with a confluence of signals.
GBP/USD daily chart
The pound has been moving lower in the session against the yen and dollar. The recent bout of risk-off sentiment has pushed cable lower and now the price has moved below 1.26 once again. The pound has been suffering on the political front as no real news came out of the recent round of Brexit talks between Boris Johnson and the EU commission. This week is also the Bank of England rate decision and some analysts think there could be another large increase in quantitative easing. But in today's upside-down world that could make GBP stronger. Lastly, on the fundamental front, the UK saw some abysmal claimant count data. The Furlough scheme seems to have kept many people in work but the claims are still on the rise.
Looking at the chart now, the price stalled at the 1.2687 area on Tuesday. At this zone, there is the 200 and 55 moving averages and 61.8% Fibonacci extension. Prior to this the price also rejected the trendline (marked with the red circle). For the downside momentum to continue it would be important for the wave low of 1.2454 level to be broken. If this does happen then the trendline would be broken too adding to the gravitas of the move.
If the price does move back up then the trendline resistance will come back into play along with the wave high of 1.2813. Before those two are tested there is the small matter of the 200 daily Simple Moving Average.
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Additional levels