GBP/USD in a Fresh Downtrend, May Slide to Level 1.3626 Low

GBP/USD in a Fresh Downtrend, May Slide to Level 1.3626 Low

Key Resistance Levels: 1.4200, 1.4400, 1.4600
Key Support Levels: 1.3400, 1.3200, 1.3000

GBP/USD Price Long-term Trend: Bearish
GBP/USD pair is in a downward move. The currency pair upward move faced rejection in May, compelling the Pound to resume a sideways trend. The pair has been in a sideways trend below the overhead resistance at level 1.4200. Meanwhile, on June 21 downtrend; a retraced candle body tested the 61.8% Fibonacci retracement level. The retracement indicates that the Pound is likely to fall to level 1.618 Fibonacci extension or level 1.3509.

GBP/USD – Daily Chart

Daily Chart Indicators Reading:
The Pound is at level 34 of the Relative Strength period 14. It implies that the Pound is approaching the oversold region. The 21-day SMA and the 50-day SMA are sloping southward indicating the downtrend.

GBP/USD Medium-term Trend: Bearish
On the 4-hour chart, the pair is in a sideways trend below the resistance at level 1.3900. The Pound faced several rejections at the resistance before the downtrend. On June 16 downtrend; a retraced candle body tested the 38.2% Fibonacci retracement level. The retracement indicates that the pair is likely to fall to level 2.618 Fibonacci extension or level 1.3626.

GBP/USD – 4 Hour Chart

4-hour Chart Indicators Reading
The Pound is below the 20% range of the daily stochastic. The pair has reached the oversold region of the market. The 21-day and 50-day SMAs are sloping downward indicating the downward move. The price bars are below the moving averages which indicate further downsides.

General Outlook for GBP/USD
GBP/USD pair is likely to continue its downward move. The pound dropped sharply after breaking the previous low at level 1.3730. According to the Fibonacci tool analysis, the Pound will reach level 2.618 Fibonacci extension or level 1.3626


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Author : Azeez Mustapha

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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.