I'm not sure whether you've noticed, but since early March, Cable (GBP/USD) has been making lower highs and lower lows in response to a rejection from the 1.2900 region.
However, the USD has lost ground to "riskier" bets like GBP due to the US economy's weaker-than-expected growth statistics and the Fed's renewed interest rate decrease rumours.
However, officials of the Bank of England (BOE) have made it clear that they would rather lower rates cautiously.
After finding support at 1.2300, the GBP/USD pair is currently moving nearer to the 1.2525 zone!
This week, will the pattern continue? After a rally from the psychological handle of 1.2300, GBP/USD is now hanging out at 1.2520, which puts trend playas in a position to join at higher prices.
As you can see, the present values of GBP/USD correspond to a zone of broken support from February and March. This time, it's also close to the R1 (1.2586) Pivot Point line, the trend line resistance, and the 100 SMA on the 4-hour chart.
In the coming days, a rejection from the trend line zone can push the GBP/USD pair down to the prior lows of 1.2300, if not lower.
However, the GBP/USD pair may break through its trend line barrier if the pro-risk, anti-USD attitude that accompanied this week's FOMC statement and U.S. NFP-related data continues.
How do you feel? As the pair tests a resistance level in the downtrend, which way will it go?
