- GBP/USD fades week-start rebound, seesaws inside short-term triangle.
- MACD signals join downbeat moving average crossover to suggest further declines, 1.2200 holds the key to welcome bears
- SMA convergence appears a tough nut to crack for buyers.
GBP/USD remains sidelined around the mid-1.2200s as it funnels down to the short-term triangle break during early Tuesday’s Asian session.
The cable pair began the week on a positive note but fails to stay firmer as the receding bullish bias of the MACD joins the looming bearish moving average crossover between the 100-SMA and the 200-SMA.
While the 100-SMA’s clear downside break of the 200-SMA from above could tease the sellers, a confirmation is needed before forming a downside bias.
As a result, a short-term triangle will be in focus and hence the GBP/USD pair’s declines below the 1.2200 become necessary for the bearish confirmation.
Following that, the cable pair could quickly drop to 1.2100 threshold before challenging the multi-month low around 1.1935 marked the last week.
Alternatively, an upside clearance of the 1.2290 hurdle could defy the bear cross and propel the quote towards the 61.8% Fibonacci retracement of May 26 to June 16 downside, around 1.2390.
However, a convergence of the stated key SMAs, near 1.2410 by the press time, appears a strong resistance to cross for the GBP/USD buyers before taking control.
GBP/USD: four-hour chart
Trend: Further weakness expected