GBP/USD: Sellers to dominate the action unless 1.1550 turns into support

GBP/USD has managed to erase a large portion of its daily losses after having dropped to its weakest level since March 2020. But bearish bias stays intact below 1.1550, FXStreet’s Eren Sengezer reports.

Sellers are likely to retain control as long as 1.1550 resistance holds

“Liz Truss is widely expected to win the Conservative Party leadership race. The market action is likely to be muted because participants want to see what the new PM will do to help households amid surging energy costs. Moreover, Brexit remains an unresolved issue that is likely to make it difficult for the pound to stage a decisive rebound.”

“In case cable stages a technical correction, 1.1500 (psychological level, static level) forms interim support before 1.1550 (static level, the upper limit of the descending regression channel, 20-period SMA). If the latter turns into support, additional recovery gains toward 1.1600 (static level, psychological level) could be witnessed.”

“On the downside, 1.1450 (daily low) aligns as next support ahead of 1.1400 (psychological level, lower limit of the descending channel).”