GBP/USD – Technical Outlook

GBP/USD continues to trade in a sideways manner between the 1.3100 and 1.3300 levels. Certainly, judging by the 4-hour chart, the pair started creating higher lows, which could interest bulls more to join in and lift GBP/USD towards higher levels. But at the same time, knowing that the 1.3300 area proved to be a strong resistance zone, we will have to stay careful with the upside potential. Until the pair decides to move out of that range, we will remain neutral.

On the upside, if GBP/USD moves higher and breaks the 1.3300 level, this could open the path towards the next key area of resistance at 1.3365, marked by the high of 9th of July. If that level is not able to withhold the rate from accelerating further, the next potential area of resistance could be the 1.3450 hurdle.

On the downside, if the pair decides to drop to its yesterday’s low at around 1.3215 and eventually breaks it, this could be a sign for more bears to step in and drive the pair towards the previously mentioned 1.3100 level. This is where the rate could stall for a while, as the bulls could try and fight back. But if the bears end up being stronger, then a further drop to the 1.3050 zone could be possible.

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