GBP/USD has been trading above the downside uptrend line support since mid-March.
Cable rallied around 3.5% since Theresa May announced a snap general election on April 18 as markets have largely priced in a Tory victory.
GBP/USD hit a high of 1.3047 on May 18, last seen on September 29, breaking a significant resistance level at 1.3000.
However, the bullish momentum has waned since Monday, because of the drop in the approval rating for the Conservative Party caused by Theresa May’s plans to cancel free school lunches and reduce free healthcare services for wealthy senior citizens.
The terror attack last night in Manchester further weighed on GBP/USD resulting in Cable falling below the significant level at 1.3000.
Currently, GBP/USD still holds above the downside uptrend line support.
However, on the 4-hourly chart, the 10 SMA is crossing over the 20 SMA, indicating bearish sentiment is increasing.
If the downside uptrend line support is broken, we will likely see a further fall in GBP/USD.
The resistance level is at 1.3000, followed by 1.3020 and 1.3050.
The support line is at 1.2950, followed by 1.2920 and 1.2900.
We will see a set of US economic data to be released between 14:45 – 15:00 BST this afternoon. It will likely affect GBP/USD.