James Chen
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GBP/USD retreats from major resistance confluence

GBP/USD (daily chart) has retreated just short of major resistance around the 1.5600 level, which it approached late last week. It has now reached back down to hit the 200-day moving average. That 1.5600-area resistance also coincided with a significant downtrend resistance line extending back to the high above 1.6300 in the beginning of the year, which connects the mid-June 1.5750 high, as well as a key 50% Fibonacci Retracement level.

This tentative turn back to the downside for the currency pair signals a slight US dollar comeback in the past several days that could be a precursor to further bearishness for GBP/USD. In this event, a breakdown below 1.5400 support could lead the way towards a potential resumption of the overall bearish trend, with major downside support objectives around 1.5000 and 1.4800. Any breakout above the 1.5600 resistance would place this bearish trend in jeopardy, in which case further major resistance resides around the noted 1.5750 level.