Technical outlook:
GBPUSD has dropped through fresh lows around 1.2268 mark during the past hour on Monday. The bearish love could be short-lived as prices are pulling back quickly to 1.2290 levels at this point in writing. Bulls are looking poised to be back in control and push through the 1.2640 level, which acts as initial price resistance on the daily chart.
GBPUSD's drop through 1.2270 lows has been accompanied by a strong bullish divergence on the daily RSI. The previous swing low close to 1.2500 has been followed by a recent low at 1.2268 until the time of writing. The RSI on the other hand, is far from printing a fresh low in tune with price action. A high probability remains for a potential bullish reversal from current levels.
Furthermore, the weekly chart is suggesting a bullish scenario with price action still testing the backside of the resistance-turned-support trend line around the 1.2250-1.2500 zone. A break above 1.2640 going forward will certainly confirm that trend has reversed for good and bulls are back in control. Aggressive traders might initiate fresh longs from current levels.
Trading plan:
Potential rally through 1.2650 against 1.2200
Good luck!
