Sterling Pound Fundamental Outlook: GBP/USD Sell-off Setup Likely to Continue

GBP/USD FUNDAMENTAL BEARISH OUTLOOK

  • Horizontal price rally leads below the 200-day
  • Only small support levels up to the next major level

HORIZONTAL PRICE RALLY LEADS BELOW 200-DAY

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Cable lost extra ground last week, but this was much less than expected after the intense Brexit tensions. Rather than Brexit on its shoulders, the broader US Dollar action weighed heavily on the GBP/USD. With regards to how the week ahead looks, it’s highly likely that there would be another weakness wave in the pair.

The last half of last week came with the sideways price rally and the lack of ability to reverse at the 200-day Moving Average, showing that it’s still in control. A closer look ahead, there is only a few minor visible support levels as Australian Dollar Might Extend Fall Despite Eased Coronavirus Restrictions.

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The next significant support level does not arrive until there is a swing low of the June trading at 12251, a handle that bars substantial Brexit developments and the strong risk-off, will most likely not be seen in the new week.

This means it will take lots of work to turn the current outlook to work in favor of the long side considering the trend of the month high. At the moment, sticking to the bearish bias until the price rally warrants the script flipping.

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