GBPUSD appears to be starting a new trend lower as price is creating a descending channel on its 4-hour time frame.

Price is just testing the resistance, though, and might be due for a move back to support. 

However, the 100 SMA is still above the longer-term 200 SMA to indicate that the path of least resistance is to the upside. Then again, the gap between the moving averages is narrowing to signal a potential crossover.

Stochastic is in the oversold region to show that sellers might be exhausted. Turning higher could draw buyers back in and lead to a move past the channel resistance.

The dollar managed to outpace its peers even as traders were out on a holiday for Monday. US markets are scheduled to reopen today and a return in risk-taking could mean weakness for the safe-haven US currency once more.

There are no reports due from the US today and none are due from the UK as well. This could leave market sentiment in control of forex price action for the rest of the day, although it’s worth noting that Brexit concerns are starting make their way to the headlines once more.

UK jobs data is up for release on Wednesday and a smaller increase in joblessness of 2.3K is eyed. The average earnings index could hold steady at 2.5% but an increase could prove bullish for the currency. FOMC minutes are due on Wednesday also, which might bring more volatility to the dollar.

By Kate Curtis from Trader’s Way