GBP/USD bears maintain control for an eighth straight day, with the currency pair hovering around 1.2810-20 during Tuesday’s early Asian session.
The Cable pair is currently testing an upward-sloping support line that dates back to early June and remains within a bullish channel that has been in place for nearly five months.
Traders of Pound Sterling are treading cautiously due to a light calendar in the UK and ahead of the Federal Reserve’s (Fed) monetary policy meeting scheduled for Wednesday.
The recent reversal of the GBP/USD pair from a 15-month high in mid-July resulted in the break of an upward-sloping support line from May 08. This break, combined with bearish MACD signals and a stable RSI (14) line, fuels the sellers’ optimism in potentially breaking the immediate support line near 1.2800.
Nevertheless, the 50-day moving average (DMA) and the lower boundary of the bullish channel, converging around 1.2670, are proving to be strong resistance levels for the GBP/USD bears.
If the support near 1.2670 is breached, the currency pair may target the late June swing low of 1.2590, followed by the previous monthly bottom around 1.2370.
On the other hand, for a possible recovery of GBP/USD, the pair must first validate above June’s peak, located around 1.2850, before challenging the multi-day-old previous support line from early May, situated around 1.3030 at present.
In the event that Pound Sterling gains strength beyond 1.3030, there is a likelihood of a rally towards surpassing the latest multi-month peak around 1.3145. Should this occur, GBP/USD bulls may set their sights on the upper boundary of the bullish channel, approximately at 1.3200 as of now.
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