GBPUSD fails at the 200-day average
17 January 2022
The GBPUSD pair dropped Monday, erasing some of last week's gains as the dollar index is trying to defend its long-term uptrend line.
During the US session, banks will be closed due to Martin L. King's Birthday bank holiday, likely resulting in thin liquidity throughout the rest of the day.
Cable is now falling toward the strong support zone of 1.36, and if that level is broken to the downside, we could see a decline to the broken long-term bearish channel. The upper line of that trend line is currently slightly above 1.35. Sterling must stay above it for the medium-term outlook to seem bullish.
On the other hand, the resistance stands at the 200-day moving average near 1.37, where the GBP failed last week. If bulls push the price above it, the long-term trend could change to bullish, targeting the psychological 1.40 level.
Should the USD index decline below the mentioned long-term uptrend line, we might see further losses for the greenback, possibly pushing the GBPUSD pair toward the 1.40 zone.