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GBPUSD recovery faces resistance near 1.3400 as momentum stays weak
Action Forex says near-term dips toward 1.3300 are more likely, with a firm break below 1.3300 raising the risk of a deeper selloff.
Cable, or GBPUSD, has been trading in a narrow sideways range for a second consecutive day after a 1.0% advance last week that completed a reversal pattern on the weekly chart, according to Action Forex.
The outlet links the rebound to the weekly close moving above the Ichimoku cloud top at 1.3335, but says the daily outlook remains less favorable, with 14-day momentum staying in negative territory.
Action Forex points to strong headwinds from the 1.3400 resistance zone, where multiple technical levels cluster, including converged 200/100/55 day moving averages and a 50% retracement between 1.3653 and 1.3140, adding that two recent daily candles with upper shadows signal indecision.
In the near term, the more likely path, per Action Forex, is dips toward the 1.3300 zone, which it characterizes as a key area to hold for further upside toward 1.3400, while a firm break of 1.3300 would weaken the structure and raise the risk of a deeper decline.