- GBP/USD retreats from intraday high, fades bounce off yearly low.
- Bullish candlestick formation, RSI conditions join three-month-old support line to lure bulls.
- Bears could aim for 1985 low on clear break of 1.1350.
GBP/USD struggles to extend the previous day’s rebound from a three-month-old support line, retreating to 1.1420 heading into Tuesday’s London open. Even so, the bullish candlestick formation and oversold RSI (14) tease the Cable pair buyers ahead of the key weekly events.
Read: GBP/USD dribbles above 1.1400 with eyes on yearly low, Fed vs. BOE divergence
GBP/USD pair’s rebound from the downward sloping support line from June portrayed a Dragonfly Doji at the lowest levels since 1985 during the previous day. The same joins oversold RSI conditions to keep buyers hopeful. It’s worth noting that the trend reversal suggesting candlestick has more importance if it's at the multi-day low, as it's in the case of the Cable pair.
However, the 5-DMA hurdle surrounding 1.1460 restricts the quote’s immediate upside ahead of the 21-DMA resistance near 1.1590.
In a case where the GBP/USD bulls keep reins past 1.1590, the monthly high near 1.1740 and July’s low of 1.1760 will be in focus.
Meanwhile, a downside break of the 1.1450 support line figures could quickly fetch the quote towards the 1.1000 psychological magnet. Following that, the year 1985 low near 1.0520 will be in focus.
GBP/USD: Daily chart
Trend: Corrective pullback expected