The GBP/USD pair ended its six-day losing streak on Monday, trading around 1.2630 during Asian market hours. Technical analysis indicates a weakening of sellers’ control, with the pair moving within a descending wedge pattern—a formation often associated with potential bullish reversals.
Oversold Signals on Daily Chart
The 14-day Relative Strength Index (RSI) hovers near 30, signaling an oversold condition that may prompt an upward correction. This technical setup bolsters the case for a rebound in the near term.
Key Levels to Watch
Support:
The immediate support lies at the psychological 1.2600 level, which marks the lower boundary of the descending wedge.
A decisive break below 1.2600 could extend the bearish trend, targeting the yearly low at 1.2299, last seen on April 22.
Resistance:
On the upside, the pair faces resistance at the upper boundary of the descending wedge, aligned with the nine-day Exponential Moving Average (EMA) at 1.2746.
Further resistance is located at the psychological level of 1.2800, in line with the 14-day EMA at 1.2804. A break above this zone could signal a stronger recovery and invalidate the bearish bias.
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