GBP/USD: At A Key Juncture, Buyers Must Show Up

We continue to see the contrast of opposing forces. On one hand, the yield spread valuation does scream to buy this market as the widening continues. However, the moment we stare at the daily price action, it’s almost the dreamed setups to engage in further selling following two pin bar rejections off 1.2680-1.27, an area that I’ve consistently highlighted as a major cluster of offers where trend traders may be looking to engage with impetus on the back of the weekly close sub 1.27.

On the hourly, the bullish structure is the Pound has been semi-compromised by the transition into ranging conditions. If the cluster of bids fails to absorb the increasing sell-sde pressure post the FOMC, the Sterling risks a renewed directional bias to the downside. The exchange rate is resting at a critical intersection, represented by a horizontal line + 3rd touch of an ascending trendline. Failure to break lower sees room for a recovery until 1.2670 ahead of 1.27, while the clearance of 1.26-2610 bids triggers the initiation of a new cycle low towards 1.2580 as the next horizontal target.