GBP/USD technical analysis: cable re-buffed at $1.33, again

GBP/USD talking points:

• It’s been a strong start to November as GBP/USD has rallied by as much as 3.59%
• GBP/USD has run into rigid resistance at the $1.33 area which has now held two different inflections – can bulls break through?

GBP/USD bullish trend re-engages with resistance

It’s been a strong month of November so far for the British pound, particularly when viewed against the US dollar as the GBP/USD pair has rallied by as much as 3.59% from the 2 November lows. The psychological level at $1.33 was tested last week; but buyers had little tolerance for momentum above that price and the pair quickly pulled back.

But that pullback was met with a higher low, showing just above the $1.31 level ahead of last week’s close, and buyers have jumped back on the bid this week to pose yet another test of the $1.33 handle. That second test took place yesterday and, again, buyers had little tolerance for bullish momentum above the $1.33 handle, and price action has again pulled back.

The big question at this point is whether this pullback turns into something more; or whether this is just another case of buyers re-loading on the bid before posing a third test of the $1.33 handle.

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GBP/USD eight-hour price chart

Taking a shorter-term look at the matter to focus in on that near-term trend, and there are a couple of points of interest for support potential. The $1.31 level/zone appears an obvious one as this is what helped to hold the pullback last week. Below that area is another big zone with a bit of historical intrigue, and this plots around the $1.30 psychological level up to the $1.3019 Fibonacci level. This could serve as secondary support potential, and if buyers are unable to hold the lows there, the probability of a deeper reversal will look much stronger.

GBP/USD two-hour price chart