The GBP/USD pair built on its modest intraday up-move and climbed back above the 1.2300 handle, reversing a major part of Friday's slide to near three-week lows, albeit lacked any follow-through post-UK macro releases.
From a technical perspective, bulls managed to defend a support marked by 50% Fibo. level of the 1.1959-1.2582 recent strong recovery move, which should now act as a key pivotal point for the pair's near-term trajectory.
Below the mentioned support, around the 1.2270 region, the pair is likely to accelerate the slide further towards the 1.2240-35 intermediate support en-route 61.8% Fibo. level - near the 1.2200 round-figure mark.
On the flip side, any meaningful recovery attempt now seems more likely to confront some fresh supply and remain capped near an important confluence support breakpoint, now turned resistance near the 1.2335-40 region.
Meanwhile, technical indicators on the 1-hourly chart have been gaining some positive traction but maintained their bearish bias on 4-hourly/daily charts, suggesting that upticks might still be seen as a selling opportunity.
Hence, it will be prudent to wait for a sustained move beyond the 1.2335-40 confluence barrier before confirming that the pair's near-term corrective slide is already over and positioning for any further appreciating move.
Source : FX Street