GBP/USD: Limited Potential for Recovery Above Daily Cloud

Cable started to gain traction and edged higher on Wednesday morning after its recent drop penetrated the rising daily cloud (cloud top at 1.2702) but found firm support at 1.2682 (100 DMA), where dips were repeatedly rejected.

The subsequent rise could generate an initial bullish signal if it returns and closes above the daily cloud. However, further upside movement (breaking the daily Tenkan-sen at 1.2780 and rising above the 38.2% Fibonacci retracement of the 1.3044 to 1.2672 decline at 1.2814) will be necessary to validate this signal.

Conversely, bearish daily indicators (daily Tenkan/Kijun-sen bear cross and strong negative momentum) suggest that the correction may be limited, offering better selling levels for a renewed attack on the 100 DMA and the nearby 200 DMA (1.2651).

Res: 1.2739; 1.2760; 1.2780; 1.2815
Sup: 1.2682; 1.2651; 1.2612; 1.2584