Valeria Bednarik, chief analyst at FXStreet explained that the GBP/USD pair fell down to 1.4350, ahead of the US session opening, but later recovered firmly above the 1.4400 level, amid broad dollar’s weakness.
Key Quotes:
“There were no fundamental releases in the UK, but on Tuesday the kingdom will release its December trade balance figures, which could bring some self live to the weakened currency. In the meantime, a bearish tone prevails in the pair, as the price declined further after correcting the 50% of its latest daily slump.
Short term, the 1 hour chart shows that the price is well below a bearish 20 SMA, while the technical indicators have bounced from oversold levels and are currently flat well below their mid-lines, all of which supports some further declines.
In the 4 hours chart, the pair has accelerated its decline after breaking below the 38.2% retracement of the same rally around 1.4525, while also breaking below its 200 EMA. In the same chart the technical indicators are aiming to bounce from near oversold levels, but the risk remains towards the downside, particularly if the 1.4400 level gives up again.”
(Market News Provided by FXstreet)