The drop seen today marks a weak follow through to the breakout confirmed on April 30 and the pair’s solid bounce from the 100-day MA seen on Friday.
The pullback from Friday’s highs, however, could be short-lived as the ascending 5- day MA is capping downside in the pair. The 10-day MA is also beginning to trend north, indicating a setup.
As a result, GBP/USD could rise above 1.3176 (Friday’s high) That would strengthen the case and open the doors to 1.3380.
Trade strategy: Buy above 1.3176 for 1.3380 with appropriate stops.