GBP/USD (a 4-hour chart)
The pound stabilized on Tuesday after Theresa May’s recent remarks. Moreover, hard-Brexit concerns continue weighing on the investors’ sentiment. Investors’ attention now turns to Manufacturing Production and Industrial Production releases.
Bears kept the market in control tightening their grip. After a brief consolidation in the Asian session the pound extended its weakness on Tuesday. Sellers pushed the pair lower and reached 1.2100 with
The technical indicators turned lower. The MACD histogram decreased which indicates the sellers’ strength. The RSI indicator remained within oversold levels.
The pound is short term oversold and may reverse some losses. We do not rule out a minor recovery to 1.2200 which is a good chance to open short positions. Despite the oversold readings we do not see any signs the pair may change its current course any time soon. A move below 1.2100 will return sellers in the driver’s seat pushing the GBP/USD pair to 1.2000.