GBP/USD - Upside Lacks Momentum - 02/16/2017 (GMT)

On a long-term basis, sterling is developing within a descending triangle against the U.S. dollar over the last five-and-a-half months with significant support obstacle at 1.1985, an all-time low. The GBP/USD pair lost its high volatility and on the daily chart seems very weak.

The GBP/USD pair plunged below the 1.2440 support level during yesterday’s trading session and managed to challenge the 50 and 100 SMAs on the daily chart, as well as, the 1.2385 barrier. Despite the run to the downside, the currency pair recovered all of its one-day losses as the dollar weakened across the board yesterday. In addition, the cable moved back and forth in the narrow range with upper band the 1.2580 resistance level and lower band the 1.2440 support handle. Technical indicators are flattening slightly above their mid-levels waiting for a sharp move in price. We suggest avoiding opening positions in this currency as there is no clear tendency or you can wait for a break below the 1.2385 critical level which will drive the pair until 1.2120.