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GBP/USD Price Review:
- Consolidated below the 1.3100 handle in what has been a highly volatile month.
- Cable may strengthen its bullish stance for the short and mid-term.
GBP/USD Price: Inside a leg lower, still above 1.30
Cable has been retracing its gains posted in the first half of December. Consolidating the price action below the 1.3100 handle, in a month that has been high in terms of volatility.
However, such bullish steam loses traction, and afterwards, the pair managed to find support at the present stage. Where a trend line has been acting as dynamic support across the board.
This is setting up a bearish corrective move that extends below the 200 SMA at the 4H chart. The current week can be described as a “rangebound” for GBP/USD. Which is now finding strong support at the present stage and is looking for the next catalyst, which will clear out the overall path.
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Is this simply a corrective phase?
Currently, the next resistance lies at 1.3181, which is the upcoming hurdle for the bulls to break.
Once the pair breaks above the mentioned barrier, the focus will shift towards the psychological level of 1.3300, where Cable has found support during the second week of the current month.
If it gives up in favour of the bulls, the pair will look to test the 1.3506 level, where the monthly highs are located. GBP/USD then should go beyond that region to rally towards the 1.3743 level, strengthening the bullish scenario for the short and mid-term.
Bears look for support below 1.30
To the downside, if the pair manages to break below the trend line that provides dynamic support, a leg lower could happen towards the 1.2773 zone.
When Cable manages a breakout below that area, all eyes will be on the 1.2579 neighbourhood, favouring the bears for the short term.
Technical oscillators remain in the negative territory, with the RSI still hovering below the 50 level. Momentum is turning flat; however, it continues to trade below the zero area so far.