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Limited positive attempts witnessed the movements of the pound against its US counterpart to reverse the expected bearish trend temporarily. As a reminder, we pointed out that the price’s consolidation, with at least an hourly candle closing above 1.2720, invalidates the activation of the bearish scenario, as the pair fails to confirm the breach of 1.2720 and returns to stability below it.
On the technical side, the simple moving average is still forming a negative pressure factor on the price, and this comes in conjunction with the return of negative signs on the stochastic, which started to lose bullish momentum.
From here, trading steadily below the main resistance of the current trading levels of 1.2720, represented by 50.0% Fibonacci correction, encourages us to maintain our negative expectations, knowing that a decline below 1.2665 facilitates the task of visiting 1.2630, and breaking it increases and accelerates the strength of the bearish trend, opening the way towards 1.2570 initially.
Only from the top, the price consolidated and at least an hourly candle closed above the previously broken support, which turned it into the resistance level of 1.2720. Fibonacci correction of 50.0% completely invalidates the activation of the bearish scenario, and the pair recovers temporarily as we await a re-test of 1.2770 & 1.2810.
Note: Today we are awaiting high-impact economic data issued by the US economy, “the results of the Federal Reserve Committee meeting,” and we may witness high price volatility.
Note: Trading on CFDs involves risks. Therefore, all scenarios may be possible. This article is not a recommendation to buy or sell but rather an explanatory reading of the price movement on the chart.
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