GBP/USD Must Retake 1.30 if Bulls are to Regain Control

The GBP/USD exchange rate sunk by 3.60% last week but is looking firmer at the time of writing on Monday. Analyst and technical forecaster Richard Perry at Hantec Markets says the technical configuration remains unhelpful for the bulls.

Thursday’s decisive decline was the latest in a line of deteriorating chart factors for GBP/USD.

Having broken 1.2980/1.3000 the market has rapidly retreated to the next key band of support between 1.2650/1.2810.

GBP/USD has lost its bullish outlook and is now in a medium term neutral zone. If support at 1.2650 is broken then a much deeper move lower can be expected.

The bulls need to be careful as the near term drive lower may have stalled in the last couple of sessions but there is nothing that suggests renewed buying pressure around here.

A near two week trend lower is around 1.2980 today and a move back into the 1.30s is needed to suggest the bulls are regaining control.

The coming days will be crucial for the medium term outlook.

The dollar has started the new trading week slightly on the backfoot, with a slightly improved appetite for risk forming this morning.

After causing a stir last week on a pause in its vaccination trials, the AstraZeneca/Oxford University collaboration for a COVID vaccine has resumed.

Although there has been little real move through bond markets, there is a mild improvement in equity markets and the dollar is slipping back.

This move may be tempered due to comments from Republican leaders over the weekend that suggested a fiscal package agreement seemed to not “look that good right now".

Having digested a dollar rebound and equities decline in recent weeks, broad markets have begun to form ranging conditions in recent sessions and this looks set to continue today.