The pound is very depressed, as the Brexit talks continue without any news on progress. This could lead to the pair's fall to the 1.25 level in the medium term. If the outlook remains valid, this will force the bulls to start taking profit.
In our technical analysis yesterday, we talked about the downward pressure line that was drawn from its highs of 1.3173. In that guideline the price made an attempt to break 1.3021, but could not sustain it, and then fell below the EMA. With 200-day MA reaching lows of 1.2880, the weekly support zone, today the price is bouncing and trading below the daily pivot point around the EMA of 200, following its short-term downtrend channel. So, if the price consolidates above 1.2945, we could go looking for buy positions up to the top of the channel at 1.2996.
On the other hand, if GBPUSD cannot sustain above 1.2960, our recommendation is to sell again with targets at the 1.2885 and 1.2843 support. The eagle indicator is showing a possible bullish bounce to the 21-day EMA.
Analyzing the market sentiment, we can see that there are 22,000 buy positions, compared to 19,265. This could mean that the market is not happy about this rebound. The more plausible scenario is that in the next few hours or days the pair could continue its downtrend. In the medium term, we recommend to carry on with sustained selling.
Our key levels are:
Buy above 1.2945 with take profit in the 1.2996 resistance zones.
Sell bellow EMA 200 around 1.2930 with targets at 1.2880 and 1.2830.
