GBP/USD stranded in narrow range

The Pound showed high volatility against the US Dollar on Monday, as the pair was trading in the 1.4063/1.3941 area during this time. Strong bearish sentiment took over the market mid-session when the rate plunge 121 pips within a couple of hours.

It has since been moving in a narrow range, thus not being able to surpass the strong bounds of the 55– and 100-hour SMAs, the weekly PP and the 38.20% Fibo retracement. Given that the northern barrier is likewise limited by the 200-hour SMA and the monthly PP, the Sterling might fail to make big advances in either direction for a couple of hours.

It is expected that support surrenders soon, forcing the rate down to the weekly S1 at 1.3871. In case fundamentals do not disrupt the current market sentiment, the rate is unlikely to move above 1.40.



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