After falling below the lower line of the wedge formation, GBPUSD is looking for an opportunity for a re-test. That opportunity might come from the EURUSD and the dollar index. ECB member Knot’s recent comments on rates to increase at a decent pace for some time might trigger an upside for EURUSD and with a positive correlation for GBPUSD as well.
1.2140 and 1.2225 are the key resistances to follow in the short term. As long as 1.2225 holds, up moves can create selling opportunities for the GBP bears. But a breakout above 1.2225 could trigger a stronger upside push.
For down moves, the main resistance is 1.20, and it could be a strong one. But, with the pressure of the broken wedge formation, a break below could trigger sharp sell-offs and lead the price to %38.2, or the middle point of the September-December rise in the coming months.
