GBP/USD traded in a consolidative manner during the European morning Monday, staying near the resistance barrier of 1.2750. The pair continues to trade below the lower end of the downside channel that contained the price action from the 29th of May until the 9th of August and thus, we will maintain the view that the short-term outlook is negative.
If the bears are strong enough to take charge from current levels, then we may see them aiming for another test near the low of the 15th of August, at around 1.2665. A break below that level could carry more downside extensions and perhaps pave the way towards our next support of 1.2585, defined by the low of the 21st of June 2017.
Looking at our oscillators, we see that the RSI has topped and fell back below its 50 line, while the MACD, although above its trigger line, shows signs of topping slightly below its zero line. These indicators support the case for the bears to take charge again soon.
On the upside, a clear break above 1.2830 could confirm that the rate has returned back within the aforementioned channel and may tempt the bulls to jump into the action, at least in the near-term. Such a move could carry upside extensions towards the 1.2920 zone, the break of which may open the path for the next resistance of 1.2975, defined by the peak of the 7th of August.
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