GBP/USD has managed to build on earlier gains and touched its highest level in nearly a week above 1.2170.
From a technical perspective, the emergence of some buying near the very important 200-day SMA warrants some caution for bearish traders. That said, the formation of a bearish multiple-top near the 1.2450 supply zone, along with the lack of any meaningful buying, suggests that the path of least resistance for the GBP/USD pair is to the downside.
Meanwhile, the 1.2000 psychological mark is likely to act as immediate support ahead of the weekly low, around the 1.1960 area, nearing the 200 DMA.
Some follow-through selling below the latter will reaffirm the negative bias and make the GBP/USD pair turn vulnerable to accelerate the fall towards the 1.1900 round figure. The downward trajectory could get extended towards the YTD low, around the 1.1840 region touched on January 6, en route to the 100-day SMA, currently near the 1.1815-1.1810 area.
On the flip side, any meaningful rally beyond the 1.2100 mark is likely to confront stiff resistance ahead of the 1.2200 round figure. The latter coincides with the 50-day SMA, which if cleared might negate the bearish outlook and prompt some short-covering. The GBP/USD pair could then climb to the 1.2235-1.2280 barrier before aiming to reclaim the 1.2300 mark.
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