GBP/USD stalls rebound, drops back towards 1.3300

• Long USD profit-taking loses steam, prompting fresh GBP/USD selling.
• Bears back in control, looks to test half-yearly lows just below 1.3300.

The USD bulls are seen fighting back control, now pushing the GBP/USD pair back towards six-month lows of 1.3295, as the rebound faltered near 1.3340 region.

GBP/USD vulnerable amid holiday-thinned light trading

The spot extended the Asian recovery from multi-month troughs in a bid to test the 1.3350 barrier in early Europe. However, fresh sellers jumped in near the last on the European open, as the greenback stalled its long profit-taking slide and regained the 94 handle across its main competitors.

In the Asian trades, Cable dropped to the lowest levels in six-months after the US dollar tumbled on the back of a sharp rebound in the EUR/USD pair, following the rejection of the anti-Euro economy minister by the Italian President.  

In the day ahead, the pair will continue to get influenced by the USD dynamics and broader market sentiment as the UK and US markets remain closed today in observance of their respective national holidays.

GBP/USD Technical Levels

Haresh Menghani, Analyst at FXStreet, notes: Looking at the technical picture, the pair has been trending lower within a short-term descending trend-channel formation on the one-hourly chart. Hence, any subsequent up-move beyond mid-1.3300s is likely to be capped at the trend-channel hurdle, currently near the 1.3400 handle. A convincing breakthrough the mentioned barrier might now trigger a short-covering bounce and lift the pair further towards an important support break-point, now turned resistance near the 1.3465-70 region.” 

“On the flip side, the 1.3300 handle might continue to protect the immediate downside, which if broken decisively now seems to accelerate the fall towards the trend-channel support, currently near the 1.3235 region,” Haresh adds.