- Sustained USD buying dragged GBP/USD lower for the fourth successive day on Tuesday.
- The bias seems tilted in favour of bearish traders and supports prospects for further losses.
- Attempted recovery moves might now be seen as a selling opportunity and remain capped.
The GBP/USD pair struggled to capitalize on its modest intraday recovery and met with a fresh supply near the 1.3040 region on Tuesday amid sustained US dollar buying. The pair turned lower for the fourth successive day and weakened further below the 1.3000 psychological mark during the early North American session.
From a technical perspective, the GBP/USD pair's inability to gain any meaningful traction or register any meaningful recovery suggests that the recent bearish trend might still be far from being over. The negative outlook is reinforced by the fact that oscillators on the daily chart are holding deep in bearish territory.
Some follow-through selling below the YTD low, around the 1.2975-1.2970 region, will reaffirm the bias and pave the way for a slide towards testing the 1.2910-1.2900 support zone. The downward trajectory could further get extended towards the next relevant support near mid-1.2800s en-route the 1.2820 area and the 1.2800 mark.
On the flip side, the daily swing high, around the 1.3040 region, now seem to act as immediate resistance. Any subsequent recovery should attract fresh selling near the 1.3100 round-figure mark and remain capped around the 1.3115-1.3120 area. The latter should act as a pivotal point for short-term traders.
Sustained strength beyond might trigger a short-covering move and lift the GBP/USD pair back towards the 1.3150 area. The recovery momentum could allow bulls to aim back to reclaim the 1.3200 mark with some intermediate hurdle near the 1.3180-1.3185 region.
GBP/USD 4-hour chart
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