GBP/USD: Drop below 1.3175 to open the way for a test of 1.31

The GBP/USD pair failed to capitalize on Friday's goodish rebound of around 100 pips, instead met with some fresh supply on the first day of a new trading week. The momentum dragged the cable back below the 1.3200 mark during the early European session. FXStreet’s Haresh Menghani analyzes the pair's short-term technical outlook.

Key quotes

“Some follow-through selling below Friday’s swing low, around the 1.3175 region, will be seen as a fresh trigger for bearish traders and accelerate the slide towards mid-1.3100s. The downward trajectory could further get extended to the 1.3100 mark before bears eventually drag the pair towards the next major support near the 1.3050-40 horizontal zone.”

“The 1.3255-65 region now seems to have emerged as immediate strong resistance. That said, a sustained move beyond might trigger a short-covering move and push the pair back towards the 1.3300 round-figure mark. A subsequent move up might negate any near-term bearish bias and assist the pair to aim back to the recent daily closing highs resistance near the 1.3385 region.”