GBP/USD bounces above 1.2410 and erases losses

GBP/USD managed to erase losses during the American session and is about to end the day hovering around 1.2470/75, the same level it closed on Friday. The pair recovered supported by a decline of the greenback in the market. The US dollar index, at the beginning of the American session, climbed above 100.00 and currently stands at 99.80/85. 

Supported above 1.2400

Today the pair was falling for the third day in a row but it found support around 1.2410. That same area offered support last week. From those levels, the pair bounced to the upside and climbed to 1.2475. Current is trading at that level, challenging the 20-hour moving average. 

Technical outlook 

According to Valeria Bednarik, Chief Analyst at FXStreet, short term technical readings are biased towards the downside, supporting additional declines ahead, particularly on a break below 1.2425/30, as the level stands for the 38.2% retracement of this year's bullish run. 

“In the 4 hours chart, the 20 SMA has turned south above the current level, now converging with the 23.6% retracement of the same rally at 1.2530, while the Momentum indicator has bounced from oversold readings, heading north below its 100 level, and the RSI indicator consolidates around 37”, Bednarik added.