GBP/USD: Dead cat bounce implies further falls

Tuesday's 4-hour chart is showing a dead-cat bounce, implying further falls for the GBP/USD pair, which is trading around 1.3070 after rising from lows near the 1.30 level, FXStreet’s analyst Yohay Elam reports.

Key quotes

“Pound/dollar has risen from the lows near 1.30 but failed to stage a meaningful recovery. This ‘dead cat bounce’ pattern – as well as setting lower highs – is pointing to weakness. Moreover, GBP/USD has failed to recapture the uptrend channel that characterized it last week.”

“On the other hand, momentum remains positive and the cable is holding above the 50, 100, and 200 Simple Moving Average. Overall, the bears are in the lead, but bulls have not thrown the towel.”

“Resistance awaits at 1.3110, the daily high, followed by 1.3170, last week's peak. The next lines to watch are 1.32 and 1.3270.”

“Support is at the daily low of 1.3050, then Monday's trough of 1.3005. It is followed by 1.2975 and 1.29.”