GBP/USD drops to fresh 3-month low
2023.09.19 04:39
- GBPUSD in a steady decline since mid-July
- Records consecutive multi-month lows and falls below the 200-day SMA
- Given that momentum indicators approach oversold conditions, can the price bounce back?
GBPUSD has been forming a structure of lower highs and lower lows since its 15-month peak of 1.3141. Meanwhile, the RSI is touching its 30-oversold mark and the stochastic oscillator is within its 20-oversold territory, both suggesting that the recent decline might be overstretched.
Should the bulls re-emerge and push the price higher, the pair could face the December-January resistance zone of 1.2445, which also served as support in September 2023. A violation of that zone could trigger an advance towards 1.2547. Even higher, the August resistance of 1.2745 may cap further upside attempts.
On the flipside, if the downtrend extends, the May bottom of 1.2307 could act as the first line of defense. Sliding beneath that floor, the price might decline towards the 1.2000 psychological mark. Should that floor collapse, the spotlight could turn to the March low of 1.1800.
In brief, seems to be in a relentless decline, but its end could be approaching as the pair has reached oversold conditions. Hence, traders should not rule out an impending bounce, which could initially bring the 200-day simple moving average (SMA) under scrutiny.
