- GBPUSD has formed a bearish continuation flag pattern on short-term charts.
- Bearish oscillators on the daily chart support prospects for further weakness.
- The pair seems vulnerable to retest multi-week lows, around 1.2765-60 area.
- The trend-channel resistance should act as a stop-loss level for bearish traders.
GBPUSD has been trending higher along an ascending trend-channel since the beginning of this week. Given the recent sharp fall, the mentioned channel constitutes the formation of a bearish continuation flag chart pattern. That said, it will still be prudent to wait for a convincing break through the channel support, currently near the 1.2900 handle, before positioning for any further depreciating move.
Meanwhile, negative technical indicators on the daily chart add credence to the bearish set-up and support prospects for an eventual breakdown. Hence, any attempted positive move might be seen as a selling opportunity and runs the risk of fizzling out near the key 1.3000 psychological mark. The latter coincides with the top boundary of the ascending channel, which should act as a stop-loss level for bearish traders.
Nevertheless, the pair seems all set the break below the 1.2900 mark and accelerate the fall back towards retesting multi-week lows, around the 1.2765-60 region, with some intermediate support near the 1.2800 handle.