The GBP/USD pair lacked any firm directional bias on Monday and seesawed between tepid gains/minor losses, just below mid-1.3300s heading into the European session.

The pair struggled to capitalize on Friday's goodish recovery from the 1.3280-75 region, or the lowest level since December 2020 and witnessed a subdued price action on the first day of a new week. The global risk sentiment stabilized a bit as investors preferred to wait and see if the new Omicron coronavirus variant would eventually derail the economic recovery. On the other hand, the British pound continues to be weighed down by persistent Brexit-related uncertainties. In the latest development, the European Commission's vice president Margaritis Schinas told Britain on Saturday it has to sort out its own migrant problems post-Brexit.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

Next 1-3 weeks: “Our latest narrative was from last Thursday (25 Nov, spot at 1.3335) where we noted that downward momentum has improved and a break of 1.3300 would shift the focus to 1.3260. GBP cracked 1.3300 on Friday, dropped to 1.3278 before rebounding strongly. Oversold shorter-term conditions could lead to consolidation first. As long as 1.3390 (no change in ‘strong resistance’) is intact, there is room for GBP to drop to 1.3260. At this stage, a sustained decline below 1.3260 is unlikely.” The lower time frames, such as the 4-hour chart will be monitored for bearish conditions and bearish structure to firm for the open. 1.3320 in this regard is compelling considering the prior highs and the W-formation's neckline that meets a 50% reversion.

Cables Need to Sustain Above 1.3280 to avoid further losses

farhan fazal

Nov 29 2021