The British pound sterling closed last week with modest declines, but not before hitting a two-month low.
Price action is still consolidating a few pips above the 1.2750 handle. Establishing support at this level could see some short term bounce to the upside.
The Stochastics on the 4-hour chart is firmly oversold, adding to the short term upside bias.
On a weekly basis, GBPUSD is quite bearish. Thus, the 1.2750 handle will be critical.
If the cable loses this handle, then we expect a decline down to the 1.2516 level next.
