GBP/USD is retesting a range support that’s been around for weeks.
Is the pair ready for a breakout? Or will it stay within its range for a bit longer?
We’re taking a closer look at the 4-hour chart:
GBP/USD 4-hour Forex Chart by TradingView
In case you missed it, Friday’s better-than-expected U.S. NFP reports pushed the U.S. dollar against major counterparts like the British pound.
GBP/USD, in particular, dropped like a rock and hit the 1.2600 psychological handle right before the week’s end.
Will the pair bounce from its current levels? Take note that GBP/USD opened the week with a bearish gap while the 100 SMA has already crossed below the 200 SMA.
On the other hand, Stochastic is showing us an “oversold” signal while GBP/USD bulls and bears are still wrestling around the 1.2600 major support zone.
Today’s U.S. ISM services PMI release could make the tug-o-war more interesting for GBP traders.
If the report comes in stronger than the previous month like the markets are expecting, then the Fed would have more reason to delay its first 2024 interest rate cut.
GBP/USD could draw in sellers and trade consistently below the 4-hour range. A sustained break with a fundamental boost could take the pair to the 1.2500 previous inflection point.
What do you think? Is GBP/USD ready for a downside breakout?