GBP/USD Downtrend Could Stay in Play
2023.09.05 07:05
returned to the red zone on Tuesday, plunging to a new two-and-a-half-month low of 1.2527 after Monday’s bullish efforts evaporated immediately near the 1.2625 constraining area.
The trend has been negative since July and the bearish crossing of the 20- and 50-day SMAs is causing concern for the near future. Moreover, the technical indicators are pointing to a continuous decline as the RSI has reversed course back to the downside below its 50 neutral mark, and the MACD has plunged below its red signal line.
Selling forces could take a breather somewhere between the 50% Fibonacci mark of the 1.1800-1.3141 uptrend at 1.2470 and the 200-day SMA at 1.2420. If the bears breach that border, the downtrend could gain another leg to 1.2300, where the 61.8% Fibonacci is located. Running lower, the pair may next test the 1.2185 barrier.
On the upside, the 38.2% Fibonacci number of 1.2625 and the 20-day SMA could cap any potential increases. The bulls will have to drive above the 1.2700 round level too in order to reach the 50-day SMA at 1.2770. Then, the 23.6% Fibonacci of 1.2820 could prevent an extension towards the broken support trendline from October 2022.
In short, GBPUSD remains attractive to sellers as the pair keeps trading within a bearish environment. The next stop could be within the 1.2420-1.2470 region.
