- GBP/USD failed to capitalize on its early uptick to the 1.2665-70 supply zone.
- The intraday dip managed to find some support near an ascending trend-line.
- The near-term set-up favours bulls and supports prospects for additional gains.
The GBP/USD pair once again met with some fresh supply near the 1.2665-70 horizontal resistance and witnessed an intraday pullback on the first day of a new trading week. The pair slipped below the 1.2600 mark, albeit managed to attract some buying near support marked by an ascending trend-line, extending from lows set last Wednesday.
The combination of horizontal resistance and trend-line support constitutes the formation of an ascending triangle on the 1-hourly chart. The ascending triangle usually forms during an uptrend and is considered a bullish continuation pattern that indicates accumulation. Hence, the near-term bias remains firmly tilted in favour of bulls.
The near-term constructive set-up is further reinforced by bullish technical indicators on 4-hourly/daily charts. However, mixed oscillators on the 1-hourly chart warrant some caution for intraday bullish traders, making it prudent to wait for a sustained move beyond the 1.2665-70 supply zone before positioning for any further gains.
Meanwhile, the triangle support coincides with 100-hour SMA. A convincing breakthrough the mentioned confluence region will negate the bullish outlook and might be seen as a key trigger for bearish traders. This, in turn, might prompt some fresh selling and turn the pair vulnerable to accelerate the slide further towards 1.2565-60 horizontal support.
GBP/USD 1-hourly chart
Technical levels to watch