GBP/USD Technical Analysis: Doji on D1, lower highs setup portray Cable weakness

• GBP/USD remains above 21-day EMA.
• A three-week-old falling trend line depicts lower highs.
• Bearish MACD also increases the odds of the pair’s decline.

Not only lower highs since late-October but a bearish candlestick formation also portrays the GBP/USD pair’s weakness as it takes rounds to 1.2855 during the early Asian session on Wednesday.

The pair formed a Doji candle on the daily (D1) chart for Tuesday, which followed an upswing on Monday. As a result, overall weakness in sentiment, as portrayed by the bearish 12-bar Moving Average Convergence and Divergence (MACD) and lower highs setup, can reverse the recent U-turn from 21-day Exponential Moving Average (EMA) level of 1.2804.

In doing so, 23.6% Fibonacci retracement of September-October upside, at 1.2766, can be the nearby support ahead of October 11 high of 1.2707 and September month top surrounding 1.2583.

However, pair’s run-up beyond 1.2940 resistance line will negate the bearish formation and can propel the quote again towards 1.3000 and the previous month high near 1.3015.

During the quote’s additional rise past-1.3015, may month high around 1.3180 will be the key to watch for the bulls.

GBP/USD daily chart

Trend: Pullback expected