The Pound to Dollar exchange rate (GBPUSD) could be at risk of retreating back to 1.20 over the coming weeks according to a new technical analysis from Bank of America, however, nearer-term studies suggest further consolidation nearer 1.24.

Paul Ciana, Technical Strategist at Bank of America, says he holds a bearish stance on Pound-Dollar while the exchange rate remains below a long-term trend line.

He says GBPUSD topped at trend line resistance and favours selling the bounce back and looking for a decline to near the 200-day SMA near 1.20.

Above image courtesy of Bank of America.

"GBPUSD topped into trend line resistance," says Ciana. "Our bias is to sell rallies in GBPUSD while below the trend line now at 1.2630 for downside to 1.20 / 200d SMA."

He says this downside bias might be invalidated if the exchange rate breaks higher above this long downtrend line.

Were this to be the case, there emerges the prospect of a rally to a new year-to-date high (to/above 1.2680) and close to 1.30, says Ciana.

Looking at nearer-term price action, Andrew Spencer, a Reuters market analyst, says GBPUSD is steady at the base of a 1.2420-1.2438 range.

Image courtesy of Reuters.

There is a lack of headline UK economic data to drive Sterling-Dollar this week which should leave the pair at the whims of the big Dollar.

Spencer says GBPUSD consolidation could be expected as markets are expected to be on hold ahead of upcoming Federal Reserve, European Central Bank and Bank of England interest rate decisions.

Spencer's technical assessment of the charts reveals daily momentum studies, 5, 10 & 21-day moving averages are all in conflict and the 21-day Bollinger bands are contracting.

He says this provides "mixed signals that suggest consolidation."