• A positive open-test drive session on Tuesday indicates a temporary bullish reversal.
• The confluence of an oversold oscillator and the lower end of a falling channel may produce a pullback.
• The 20- and 50-period EMAs are trending lower, which adds to the downside filters.

The GBP/USD pair has witnessed a base formation around 1.3000 after a significant plunge from February 23 high at 1.3620. The cable has witnessed a positive open-test drive session on Tuesday as the pair opened 1.3003, slipped near round 1.3000, and found some significant bids that drove the major higher.

On the daily scale, GBP/USD is auctioning in a falling channel formation whose upper end is placed from 6 January 2021 high at 1.4249 and the lower end is marked from 24 January 2021 low at 1.3670. A tap near the lower end of the falling channel is considered a pullback by the market participants. It is more likely that the cable will find a pullback around 1.2965.

The 20-period and 50-period Exponential Moving Averages (EMAs) at 1.3243 and 1.3370 respectively, are trending lower, which indicates significant weakness ahead.

Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in a range of 20.00-40.00, which indicates a bearish setup. However, a confluence of an oversold situation with the lower end of a falling channel may result in a potential pullback.

The cable may likely find significant bids near 1.2965, which will push the pair on the upside towards March 8 low at 1.3082 and 8 December 2021 low at 1.3160.

While bears can continue holding grip if the major slips below 2 November 2020 low at 1.2854. This will send the cable lower towards 30 September 2020 low at 1.2805 and 23 September 2020 low at 1.2675.

GBP/USD daily chart