GBP/USD: Charts point to a bounce

GBP/USD Monday's four-hour chart is showing oversold conditions. Yohay Elam, an analyst at FXStreet, examines the cable from a technical perspective.

Key quotes

“The Relative Strength Index on the four-hour chart is below 30 – indicating oversold conditions and a potential bounce. On the other hand, momentum is pointing down and GBP/USD is well below the 50, 100, and 200 Simple Moving Averages.” 

“Some support awaits at the daily low of 1.2258, followed by 1.22, a low point in October.” 

“Resistance awaits at 1.2370, a temporary cap, and then by 1.2425, the daily high.”