Technical Analysis – GBPUSD 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.

Latest News

Pound rally eases ahead of UK CPI and PMI data as BoE again flags rate hike – Forex News Preview

Technical Analysis – AUDUSD improves off 23.6% Fibonacci level

Netflix Q3 earnings: A squid game boost? – Stock Market News

US Open Note – Inflation risks and the rate conundrum, dollar hangs in there

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.