Looking at the recent GBP price action it seems the price has pulled away from the oversold area. This is a mean reversion type move for now but GBP/USD will be a competition over USD weakness vs Brexit headlines over the coming sessions. The dollar index is trading 0.30% lower at the moment and that is the same as GBP/USD at the time of writing. So it might not be that GBP is improving but more that the USD strength was slightly overdone and there has been a retracement.
GBP/USD analysis: Dropped below 1.3000
On Tuesday, the GBP/USD exchange rate dropped below the weekly S2 at 1.3007.
From the one hand, it is likely that some downside potential could continue to prevail in the market. In this case the currency pair could face the support level formed by the weekly S3 and the monthly S2 at 1.2835.
Meanwhile, it is unlikely that bulls could prevail in the market in the nearest future, and the exchange rate could exceed the 1.3100 area due to the resistance formed by the weekly and monthly S1s, as well the 55-hour SMA.
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