GBP/USD Price Analysis: Trims a part of early recovery gains to 1.2440 area

• GBP/USD stages a goodish intraday bounce from 61.8% Fibo. level support.
• The intraday uptick meets with some fresh supply ahead of the 1.2450 level.
• The set-up supports prospects for a further near-term depreciating move.

The GBP/USD pair found some support near the 61.8% Fibonacci level of the 1.2076-1.2813 move up and staged a goodish bounce on the first day of a new trading week.

However, the intraday positive move faltered ahead of mid-1.2400s – resistance marked by 50% Fibo. level. The pair has now retreated around 55-60 pips from the daily swing highs and was last seen hovering around the 1.2485 region.

Meanwhile, technical indicators on 1-hourly charts have again started drifting into the negative territory. This comes on the back of bearish oscillators on 4-hourly/daily charts and suggests the loss of intraday momentum.

Sustained weakness below mid-1.2300s will reinforce the bearish outlook and set the stage for a further near-term depreciating move. The pair might then accelerate the fall to the 1.2300 mark before eventually dropping to 1.2260-50 support zone.

On the flip side, bulls are likely to wait for a convincing breakthrough the 50% Fibo. level, around the 1.2440-50 supply zone, before positioning for a move back towards reclaiming the key 1.2500 psychological mark.

This is followed by resistance near the 38.2% Fibo. level, which if cleared will negate any near-term negative bias. This, in turn, might lead to a short-covering move and lift the pair back above the 1.2600 round-figure mark.

GBP/USD daily chart

Technical levels to watch