GBP/USD Slips To One Month Low; Bias Bearish

GBPUSD retraced to an almost one-month low of 1.3640 on Monday after a multi-day battle with the 200-day simple moving average (SMA) and the 1.3840 barrier, where a dashed resistance trendline also happens to be.

The pair is currently trying to heal yesterday’s wounds, but downside risks remain intact as the RSI is fluctuating comfortably below its 50 neutral mark, the Stochastics have yet to bullishly cross each other in the oversold area, and the MACD continues to stretch within the negative zone and below its red signal line.

As regards the market structure, the three-month-old neutral trajectory is still in place despite the recent sell-off and only a decisive close below the lower boundary of 1.3600 would put the pound back on the bearish path. If that is the case, support could be next detected within the 1.3500 – 1.3450 restrictive area, last active from the end of 2019 to the start of 2021.

On the upside, the bulls will need a clear victory above the 200-day SMA at 1.3840 to sustainably drive towards last week’s peak of 1.3912, though the 20- and 50-day SMAs could challenge any bullish attempts beforehand around 1.3780. Should the rally face no limits, the door would open for the 1.3982-1.4000 resistance zone, a break of which could open the door for the 1.4100 handle. Still, unless the pair resumes the long-term uptrend above the three-year high of 1.4248, there won’t be much to celebrate.

In brief, the technical signals remain discouraging for GBPUSD despite today’s push for some recovery. A move below 1.3600 could bring new sellers into the market, switching the outlook to bearish, while a bounce above 1.3840 could enhance buying exposure in the market.

GBPUSD_21_09_Daily

GBPUSD_21_09_Daily

GBP/USD Slips To One Month Low; Bias Bearish

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