GBP/USD Reaches Oversold Region but Consolidates Above 1.2275

Updated:

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 is in a downtrend as it consolidates above 1.2275. The Pound has already fallen to the oversold region of the market. The selling pressure is likely to ease as the pair reaches the low of 1.2318. Meanwhile, on April 28 downtrend; a retraced candle body tested the 78.6% Fibonacci retracement level. The retracement indicates that the Pound will fall but reverse at level 1.272 Fibonacci extension or 1.2223.

GBP/USD Reaches Oversold Region but Consolidates Above 1.2275
GBP/USD – Daily Chart

Daily Chart Indicators Reading:
The Pound is at level 27 of the Relative Strength Index for period 14. The currency pair is trading in the oversold region of the market. The 21-day line and 50-day line moving averages are sloping downward indicating the downtrend.

GBP/USD Medium-term Trend: Bearish
On the 4-hour chart, the Pound is in a downward move. The market has fallen and reached bearish exhaustion. Meanwhile, on May 6 downtrend; a retraced candle body tested the 78.6% Fibonacci retracement level. The retracement indicates that the Pound will fall but reverse at level 1.272 Fibonacci extension or 1.2174.

GBP/USD Reaches Oversold Region but Consolidates Above 1.2275
GBP/USD – 4 Hour Chart

4-hour Chart Indicators Reading
Meanwhile, the market is 40% range of the daily stochastic. It indicates that it is in the bullish momentum. It indicates that the pair is in a bullish momentum. The Pound will resume its upward move. The 21-day and 50-day SMAs are sloping downward indicating a downtrend.

General Outlook for GBP/USD
The currency pair has fallen to the oversold region as it consolidates above 1.2275. The Pound is fluctuating above level 1.2260 but the upward move is facing resistance at the 21-day line SMA. The uptrend will resume if price breaks above the moving averages. However, the pair risks another decline if current support is breached.

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Azeez Mustapha

Azeez Mustapha is a trading professional, currency analyst, signals strategist, and funds manager with over ten years of experience within the financial field. As a blogger and finance author, he helps investors understand complex financial concepts, improve their investing skills, and learn how to manage their money.