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.

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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.

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